Investors on the Zimbabwe Stock Exchange (ZSE) made a killing after they amassed a cumulative $30 billion in September in gains that market watchers say are a sign of confidence in the market.
This 17,5 percent gain in market value, will probably come above inflation for the month under review, seeing that it is slowing down and only stood at 8,44 percent in August on a month-on-month basis. Inflation for September is expected to have been within that.
On a regional comparative, the ZSE remains the top performer with year -to-date gain of 611 percent and year -on-year gain of 606 percent trailed by Rwanda Stock Exchange with a 9 percent gain while exchanges in Lusaka, Johannesburg and Egypt have recorded year-to-date losses of 10 percent, 6 percent and 20 percent in that order.
Using a like for like comparative US dollar, the ZSE’s gains were still ahead of other markets, up more than 40 percent, while Rwanda was a distance second with an approximate 8 percent gain.
The gains on the ZSE comes as the local currency has continued to appreciate on the Reserve Bank of Zimbabwe (RBZ) foreign currency auction system which was introduced in June this year to replace the interbank market.
The foreign currency auction system, which is held every Tuesday has seen the local currency appreciate for the past five consecutive sessions as confidence in the foreign currency market continues.
By close of the last auction, the rate was pegged at $81,4439 from $81,4965 in the prior week. It started the month of September at $83,32.
Industry and commerce agreed the platform would enhance transparency in trading of foreign currency, efficient distribution of foreign exchange as well as ensure market-led price discovery and improve availability.
The economy has been battling foreign currency shortages which resulted in the exchange rate skyrocketing on the illegal parallel market, fuelling a spike in prices of goods and services.
During September, total market value on the local bourse appreciated by $30 billion or 17 percent to close the month at $206 billion driven mainly by gains in the market’s top cap counters.
The primary indicator, the ZSE All Share Index gained 17 percent to settle at 1 638 points from 1 389 points as investor cheer continued.
At 1 093 points, the market’s top capitalised counters, the ZSE Top 10 Index rose by 19 percent month-on-month on firming demand.
Their consistent dividend policies, cash generative businesses adds to their allure in a volatile economy where investors generally want a good return on investments.
In latest financial results the half year and full year to June 30, 2020, big cap counters such as Innscor and the market’s biggest counter – CBZ have maintained their dividend policy. CBZ is also the market’s top gainer on a year to date basis followed by Cafca, Bindura, FBC and Dairibord that recorded gains of 7 488 percent, 3 326 percent, 2 434 percent, 2 265 percent and 2 119 percent in that order.
Month-on-month, financial services group FBC rose by 71 percent to $15,43 from $9 while Powerspeed rose by 20 percent to $1,90.
On the resources side, one of the two active mining counters, Bindura, put on 3,7 percent to $4,10. – Sunday Mail