ZSE investors yield $1,5bn in January

HARARE – Investors in the Zimbabwe Stock Exchange (ZSE) gained a cumulative US$1,5 billion in January despite a business slowdown experienced in the month due to some strike induced instability.

During the month, the ZSE lost three days of trading following an internet shut down amid violent protests that erupted after the MDC Alliance, Zimbabwe Congress of Trade Union (ZCTU) and some NGOs called for a three-day stay-away.

In January, total market value rose 7,5 percent or US$1,5 billion to close at US$20,8 billion as investors opted for stocks as a safe hedge against economic instability such as inflationary pressures.

Figures from the Zimbabwe National Statistical Agency (Zimstats) show that the country closed 2018 with an annual inflation of 42,09 percent tanks largely to a one-off cost of living jump in October.

Among key challenges bedevilling the economy are foreign currency shortages that have negatively affected local industry’s production. Market watchers contend increased export oriented production will help ease the foreign currency challenge and narrow the trade deficit.

The country incurred a trade deficit of US$2,5 billion, which is 50 percent above the US$1,8 billion in the prior year.

Affordable capital for companies to retool and enhance production would be key in addressing supply gaps, competitiveness and boost economic activity.

In January the primary indicator, the ZSE All Share Index gained 7,7 percent to 157,54 points while the Industrials Index put on 7,96 percent to settle at 525,9 points on gains across board.

At 158,28 points, the market’s elite club, the ZSE Top 10 Index was 9,14 percent stronger, buoyed by gains in the top cap counters.

The Mining Index was the only index to close the month pointing southwards with a 6,4 percent loss to 213,13 points on losses in Bindura.

Diversified media group, Zimpapers paced the fastest in the month with a 108 percent increase to US6 cents followed by clothing retailer, Edgars that advanced 54,9 percent to settle at US15,8 cents.

Hospitality group, African Sun added 40 percent of value to close at US14 cents while brick making firm, Willdale rose 37,9 percent to US1,2 cents.

Art capped the top five risers with a 34,1 percent gain to US11,8 cents. Diversified group, Meikles and ZPI put on 27 percent each to close pegged at US65 cents and US3,2 cents respectively while Old Mutual rose by 25,4 percent to US$9,94.

Also on the upside, Padenga ticked 23 percent to US$1,05 while FCB rose 21 percent to US7,15 cents. The banking group has put on hold the proposed unbundling of its non-core banking properties into a separate entity that was meant to be listed on the bourse.

Biggest stock by market value Delta, advanced 15,9 percent to US$3,16 while Econet inched up 5,5 percent to US$1,50.

The market was not short of fallers. Of the 11 stocks to close the month in the negative, ZHL fell the hardest with a 17,6 percent decline to US2,11 cents followed by Bindura which lost 15 percent of value to close at US7,99 cents, dragging with it the resources index.

Dairibord retreated 14,9 percent to US14 cents while Star Africa eased 13,8 percent to US1,12 cents. Financial services group, FBC fell 8,5 percent to US32,01 cents and regional cement maker PPC lost 5,3 percent of value to settle at US$1,80.

National Foods remained unchanged US$7,10. Also remaining flat was BAT which closed at US$33 remaining the most expensive stock on the bourse.