ZSE Market Commentary 02 April 2024
ZSE Daily Comment
The ZSE closed the month of March and opened the new month of April on a sustained bull-run as uncertainties around the launch of a new currency later this week along with expected announcement of new monetary policy measures led to hedge-seeking in stocks.
The mainstream ZSE All Share Index surged by 3.46% in early week trades to close at a new all-time high of 903,513.4 points. The positive performance was evenly driven by market heavies and medium caps while penny stocks retreated by a mild -0.85% as investors tend to prefer high-value stocks as safer havens. On a year-to-date basis, the ZSE All Share Index is up 328.5% in nominal terms, which translates to 16.5% in US$ terms. The All Share Index achieved a nominal and real-term growth of 66.2% and 12.4%, respectively, in the recently ended month of March.
The US$ denominated bourse, VFEX, opened the new week and month in positive territory, sustaining a positive YTD return amid economic uncertainties ahead of the official launch of a structured currency on Friday. The mainstream VFEX All Share Index rose by 0.7% today to close at 101.78 points, scaling up year-to-date gains to 1.8%. In the recently ended month of March, the bourse garnered a positive return of 2.5%.
The All Share Index was rebased to 100 at the end of 2023 following the addition of six new listings in 2023. Today’s positive performance was driven by 3 risers which outweighed 2 laggards. An aggregate of US$109,089 exchanged hands in today’s session, down from US$485,095 traded in the prior session.
On the currency markets, a recent tightening of the money supply has resulted in reduced activity on the parallel currency market, allowing the interbank exchange rate to close in on the gap. The exchange premium has shrunk from 86% in January to a circa 30%. Meanwhile, the Auction market remains suspended since December 2023 as the government seeks to revise the operational model in a bid to stabilize exchange rates. However, at the close of the most recent auction trading week, the ZWL shed off -0.65% against the US$ on the Auction market to close at ZWL5,828 per US$. On the interbank market, the ZWL depreciated by -1.75% against the US$ today to close at ZWL22,447.53.
An aggregate of 26 counters exchanged hands in today’s session, with 7 sailing stable while 16 emerged risers. A total of 5 counters came out as the top performers in the session on rising 15% each, and these included ZBFH which recouped prior session’s losses to settle at 635375c. RioZim buttressed prior session’s gains to close at 138000c, while SeedCo extended the positive streak to a 6th straight session to settle at 395490c. Financial ticker, FBCH, closed at 471498.47c, while AFDIS capped off the Top 5 Risers’ set on surging 15% to settle at 549500c.
On the downside, a total of 3 counters partially countered the risers. Bridgefort Capital Limited performed the worst in the session on dwindling -58.82% to close at 3500c, trailed by beverages giant, Delta, which partially set off prior session’s gains on softening -0.37% to settle at 1659041.70c. Tanganda Tea Company retreated by a mild -0.07% to close at 511076.92c, capping off the laggards’ pack.
Total turnover rose by 149% from prior session’s record to ZWL14,732 today against a 74% growth in overall shares traded. Econet led turnover contributors in the session, contributing 26% of the aggregate turnover and was trailed by Delta, BAT, Proplastics and Meikles in that respective order. Overall foreign outflows contributed 0.01% to aggregate turnover in the session while inflows held a foothold of 0.01%.
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