ZSE Market Commentary 24 January 2024
Equities march ahead as ZNCC pushes for IMTT correction
HARARE – Equities continued to march forward in record territory although turnover momentum continued to be concentrated in a few stocks.
The All Share Index added 3.24% to 392 630.51 in a session which yielded 20 risers and three fallers. Market capitalisation was at $31.9 trillion or US$3.39 billion using the interbank rate of 9 414.44. A total of six heavyweight stocks now carry a value of above $1 trillion with Delta leading at $10.08 trillion.
Turnover was at $7.33 billion supported by Delta ($4.62 billion) and Econet ($1.35 billion). Volume amounted to 2.54 million shares in 289 transactions. Foreigners sold $829.63 million, mostly out of FBC and purchases were at $789.8 million.
The Top Ten Index put on 2.26% to 1278 727.74 and is now close to doubling its January gains at 98.40%.
BAT Zimbabwe and First Mutual hit limit up to 3 012 569.93c and 138 290c respectively. EcoCash rose 14.99% to 31794.74c while marginal gains were seen in Econet and Delta.
CBZ was, however, 3.47% lower to 550198.02c.
The Medium Cap Index was the standout performer with a 5.84% gain to 1 345 787.40. Truworths led the day’s risers gaining 35.61% to 7 040c as investors continue to await its reconstruction and restructuring following last year’s successful capital raise. Nampak and Tanganda each rose 15% to 43 585c and 213 520c, respectively.
Fractional losses were recorded in Star Africa and Zimre Holdings.
The Old Mutual Top Ten ETF rose 15% to 6549c while gains in the Datvest MCS and the Morgan & Co MIZ were fractional. Total turnover was at $4.68 million.
Turnover on the VFEX was subdued at US$14 866.87 after 159 632 shares traded. Simbisa shed 2.04% to 35.02 US cents to send the All Share lower by 0.35% to 97.67.
Meanwhile, local businesses are set to engage the Zimbabwe Revenue Authority (Zimra) to expedite the correction of calculating the 2% Intermediary Money Transfer Tax (IMMT) on amounts exceeding US$500 00.
ZNCC President Mike Kamungeremu, whose lobby group has long called for the abolishing of the tax, said that engagements with the authorities have been slow but remain “work in progress”.
IMTT has a rate of $0.02. Any transaction exceeding equivalent in ZWL of US$500 000 has a maximum tax of US$10,150 (at the Interbank Rate) payable in ZWL. For foreign currency, rate of tax is USD0.01. Any transaction exceeding USD500 000 has a maximum tax of USD10 150.
Zimra said they are currently seized with correcting the error as business will continue to pay more than what they should as the error is engraved in law.
“IMTT is still 2 cents per $ with the maximum threshold at US$500 000 or Zimbabwean equivalent. Anything above US$500 000, the tax is US$ 10150. That is what is in the law right now. But we have noted that there is an error as 2% of that figure is US$10 000. The same can be said for the US$ IMTT,” said Zimra
The authority was, however, tight lipped when asked if the companies will be able to recoup the extra money they have been paying, before the abnormally was spotted.
-finx