ZSE remains bullish as investors pocket billions

HARARE – A bullish sentiment continued to prevail on the Zimbabwe Stock Exchange (ZSE) as investors pocketed almost $300 billion cumulatively in one week with key indicators reaching all-time highs.

By close of Thursday trade, total market value was pegged at $1,5 trillion from $1,2 trillion a week earlier driven by gains in blue chips.

At 12 312 points, the primary indicator, the ZSE All Share Index surged 22 percent from 10 054 point in comparable week, reflective of the gains recorded across board.

Demand in the market’s top cap counters saw the ZSE Top 10 Index jump 27 percent to 7 827 points from 6 142 points.

Selected blue chips continued to glitter on the market with telecoms giant, Econet, closing the week at $89,94 as it surged to become the biggest counter by market value, ahead of beverages maker Delta and Cassava, which closed at $178 and $50 respectively. Cassava shares resumed trading during the week under review following a temporary suspension on October 04, for failing to release financial results for the year to February 28, 2021 on time.

Cigarette maker and most expensive stock on the bourse, BAT closed the week at $2 750.

By close of Thursday trade, the Old Mutual ETF had gained 1,46 percent to trade at $4,05 after 188 873 units exchanged hands, yielding a value outturn of $766 680.

The market has enjoyed a fine run in the past month on the back of increased liquidity, which is finding its way on equities. As at October 8, 2021, reserve money stood at $28,05 billion up from $24,84 billion in June this year. As at end of August 2021, Broad Money Supply stood at $329,2 billion. Over the year to August 2021, broad money grew by 125,24 percent, compared to 642,1 percent over the same period last year.

Market watchers have, however, warned investors to be cautious in picking stocks on the bourse as the current rally will not last forever. As such, there is need for proper checks as inflationary pressures noted during the third quarter of the year will cause economic volatility.

IH Securities warned the stock market bubble will burst, which calls for careful consideration of the obtaining macro-economic environment before committing to a particular stock.

“We caution against prescriptively applying historical performance to future expectations. The current run on the parallel market is not being accompanied by the same level of growth in inflation figures and it is happening in the presence of increased production unlike in the past,” said IH Securities in their quarterly review for the third to September 30, 2021.

Others have said the market will self-correct when the central bank tightens screws on liquidity. Under such a scenario, consumer oriented stocks, such as Natfoods have been tipped to continue on a growth trajectory on increased demand for staples during the festive season, as disposable incomes also improve in line with increased economic activity after relaxation of Covid 19 restrictions.

Elsewhere on the Victoria Falls Stock Exchange (VFEX), crocodile breeder – Padenga traded 121 652 shares at a price of US22 cents while, no trades were recorded in SeedCo International. – Herald