ZSE Market Commentary 24 April 2024
ZSE and VFEX in Positive Territory as ZiG Holds Ground Against US$
The ZSE buttressed prior session’s gains in mid-week trades as hopes of value preservation amid a sustained appreciation of the ZiG against US$ drove up investor sentiment. This follows the introduction of a new currency, the ZiG, as well as a contractionary monetary policy on the 5th of April, 2024. In-line with the change in the local currency, the ZSE changed its functional currency to ZiG, and rebased all indices to 100 on the 8th of April in a bid to effectively reflect the effect of the new currency on financial markets.
Likewise, all share prices were also converted to ZiG at a rate of 2,498.65 upon introduction. In today’s session, the mainstream All Share Index went up by a widened margin of 0.8% to close at 97.2 points. Since the rebasing of indices, the All Share Index is down -2.8% in nominal terms, which converts to -0.5% in US$ terms amid a sustained appreciation of the ZiG since then.
The US$ denominated bourse, VFEX, halted a bear-run that had extended to 5 consecutive sessions in mid-week trades as activity in market heavies increased amid improved investor sentiment. The mainstream VFEX All Share Index surged by 1.84% to close at 95.14 points, with gains driven by Simbisa which outweighed 7 laggards while there were no risers.
The All Share Index was rebased to 100 at the end of 2023 following the addition of six new listings in 2023. The bourse has suffered a -5.9% loss since the beginning of April, countering a growth of 2.5% recorded in March. On a year-to-date basis, the All Share Index closed at a loss of -4.9% today. An aggregate of US$78,135 exchanged hands in today’s session, up from US$118,455 traded in the prior session.
On the currency markets, the Zimbabwe government introduced a new currency on the 5th of April 2024, backed by gold reserves and foreign currency. The Central Bank also announced new monetary policy measures on the same day, further tightening its stance on money supply while, however, slushing borrowing costs from 130% to 20%. The new MPS highlighted that the currency auction market has been replaced by the Interbank market, which will be used to liquidate all ZWL balances into Zimbabwe Gold (ZiG), the new currency. Today, the ZiG appreciated by 0.01% against the US$ to close at 13.25. The exchange rate is computed by dividing the US$ by gold price per milligram.
An aggregate of 18 counters exchanged hands in today’s session, with 5 sailing stable while 9 emerged risers. Star Africa came out as the top performer for a 2nd consecutive session on notching 26.65% to settle at 0.45c, followed by FMP which firmed by 14.83% to close at 31.85c. SeedCo recouped prior session’s losses on rising 10.53% to settle at 174c while Nampak buttressed prior session’s gains by a further 10.18% to close at 55.67c. OK Zim partially countered prior session’s losses on gaining 2.68% to settle at 56.71c, capping off the Top 5 risers’ set.
On the downside, a total of 4 counters partially weighed on the market, with Econet performing the worst on dipping -3.39% to close at 145c. Turnall retreated by -2.1% to settle at 2.65c, trailed by Meikles which extended prior session’s losses by a further -0.05% to close at 243.25c. Hippo shed off -0.001% to close at 378c, capping off the laggards’ pack.
Total turnover rose by 189% from prior session’s record to ZiG3.67 million today against a 183% growth in overall shares traded. Econet led turnover contributors in the session, contributing 77% of the aggregate turnover and was trailed by Delta, ARTD, Hippo and FMP in that respective order. Foreign inflows contributed 0.001% to aggregate turnover in the session while outflows held a foothold of 64.47%.
COMPANY EVENTS AND MEETINGS
Masimba Analyst Briefing Boardroom, Masimba Holdings Limited, 44 Tilbury Road, Willowvale, Harare on Friday, 26 April 2024 1200 Hours
BAT AGM 1 Manchester Road, Southerton-Friday, 26 April 2024 1000 Hours
Equity Axis