ZSE shares in 11.43% weekly gain

HARARE – Zimbabwe Stock Exchange shares were firmly in positive territory after closing Friday with a weekly gain of 11.43%.

This comes amid a renewed uptick in the parallel market rate and an expected increase in inflation even though the central bank maintains that money supply growth is being kept in check.

Meanwhile fuel prices have gone up with diesel increasing 4.63% and 3.25% to $105.58 and US$1.27 respectively. Petrol prices rose 5.51% and 4.13% to $104.82 and US$1.26 in that order.

Energy Minister Zhemu Soda told FinX that recent increase at FOB, coupled with exchange rate movements and tax adjustments prompted the energy regulatory authority to increase fuel prices.

“There has been an increase in FOB prices. Diesel saw a 7% price increase and petrol rose 11%. This together with the movement of the exchange rate on the auction system necessitated the need for the price increase.”

There has however not been a change in all other factors including levies and duties. This comes amid growing concern that the sector is once more open to arbitrage opportunities due to the widening gap between the official exchange rate and parallel market rate.

At the close of trading, the All Share Index gained 2.73% to trade above the 4 000 level at 4 012.47 as penny and mid-tier stocks outperformed the market. Turnover was at $101.44 million in 485 trades.

The foreign sell-off continued at $58.01 million against insignificant buys of $135 973.50. The foreign sales were mostly out of Innscor at $28.39 million, Econet $11.6 million and OK Zimbabwe at $11.4 million. Weekly turnover was at $336.65 million.

Edgars led the risers, gaining 20% to 138c. The group recently commenced online shopping to minimise the impact of the current store closures on performance. Unifreight continued its low volume ascent after putting on 19.95% to 114.25c in trades worth $457 and Willdale put on 7.41% to 41.73c.

The gains ensured that the Small Caps lead the index performers with a lift of 5.71% to 14 316.79. The Small Cap Index is, however, still below wider market performance with a year to date gain of 20.55%.

The Medium Cap Index added 4,24% to 8 526.48. Lafarge, which is set to report better than expected December finals was 19.75% higher to 1 880c. Seed Co added 18.35% to 3 531.65c in the wake of its trading update which showed volume recovery due to improved sales of maize, soya bean and wheat seeds. Revenue in the nine months to September was up 49%.

The group however said that the tight monetary policy characterised by limited liquidity and high interest rates had an adverse impact on the company’s funding and finance costs. The group told FinX that total borrowings (short term) at the end of the period stood at $1.5 billion at average cost of 40-45% adding that the facilities had a roll over option.

There were however marginal losses in Dawn Properties, which lost 2.23% to 40.33c, Masimba down 1.84% to 1 600c and ZHL which pared 1.78% to 264.21c. Dawn and ZHL currently have negative returns in the year to date.

The Top Ten Index was 1.98% up to 2 526.95. Padenga was the top blue chip performer after gaining 11.36% to 3346.46c and Cassava added 9.40% to 1167.51c although the last traded price was at 1 200c. Delta put on 6.06% to 4720.89c and OK Zim added 7.58% to 1759.01c.

Total market capitalisation closed at US$4.4 billion (using an exchange rate of $110:US$1).-Financial Express.