ZSE capitalisation surges 4,6% on multi-currency ban

The Zimbabwe Stock Exchange’s capitalisation on Monday increased by 4,6% to ZWL$30,86 billion as the market reacted to government’s decision to outlaw a multi-currency system adopted a decade ago.

By Tatira Zvinoira

The industrial index was up 4,05% to 773,06 points, sustained by gains recorded in Econet (ECO:ZH), which was up 11,27%, while Cassava (CSZL: ZH) picked 7,40%.

Beverages manufacturer Delta (DLTA: ZH) was also up 1,39%.

The mining index gained 3,13% to close at 291,49 on the back of a 5,09% gain in RioZim (RIOZ: ZH).

The all share index rose 4,05% to 231.74 points, while the Top 10 Index gained 4.95% to 228.50 points.

Other notable gains for the day were recorded in Dawn (DAWN: ZH), up 19,94%, Mashonaland Holdings (MASH: ZH) up 17,70% and Meikles (MEIK: ZH), up 5,31%.

The only loss for the day was observed in Old Mutual (OMU: ZH), down 0,25%.

Total value traded increased 21,32% to $35,28 million, dominated by trades in CBZ (CBZ: ZH), Cassava (CSZL: ZH) and Old Mutual (OMU: ZH), contributing 36,71%, 12,08% and 8,20%, respectively.

The market is expected to trade sideways today.

The official and parallel markets for currency remained largely flat, trading at US$1:ZWL$6,48 and US$1:ZWL$12, respectively.

Activity on the usually busy street market for currency was heavily subdued, as traders adopted a wait-and-see approach.

“Some people are not selling; things are not stable. For those who are selling, if you want US dollars for bond notes, you get it for US$1:ZWL$10 and for transfers, they are running for US$1:ZWL$14,” an informal currency dealer operating from the Fourth Street bus terminal told NewsDay Business.

“Some cash dealers are now opening these bureaux de change and you can get the US dollar, but they are selling at parallel market rates.”

In Bulawayo, dealers were selling at much lower rates, as most people waited to see how the market would react in the coming days.

Speaking in Victoria Falls yesterday, President Emmerson Mnangagwa said the re-introduction of the Zimbabwe dollar had brought the country back to normalcy.

“Zimbabwe has gone back to normalcy. A country must have its own currency; that is normalcy. We were living in an abnormal situation and you should be the first to congratulate us on becoming normal again,” he said.

Reactions to the re-introduction of the Zimbabwe dollar have so far been mixed, and while many have commended the removal of the multi-currency basket, experts have cautioned that without the necessary fundamentals in place, this could end up disastrous.

Source: News Day