• June 10, 2024
• Marketing @ C-TRADE
• Market Commentary

WEEKLY MARKET ROUND UP- : ZSE WEEKLY: ZSE and VFEX Surge Amid Increased Liquidity as ZiG Depreciates

• ZSE reaches new all-time high, leverages on increased liquidity
• VFEX closes in positive YTD position
• ZiG mildly depreciates, sustains average range

The ZSE reached a new record high in the week under review as increased liquidity and a positive inflation result from ZIMSTAT pushed investor morale and interest. On the week ended Friday the 7th, the ZSE All Share Index gained 4.98% to close at 106.1 points, with gains evenly spun between market heavies and medium caps while penny stocks remain constant since the rebasing of indices. 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 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. Since then, the ZSE has gained 6.1% in nominal terms, which converts to 7.2% in US$ terms. The ZSE garnered a nominal return of 2.28% in the just ended month of May, which translates to 3.14% in US$ terms as the ZiG appreciated against the US$ in the respective period.

The US$ denominated bourse, VFEX, reached a positive year-to-date position in the week under review after a successful recovery from the recent bear run on the back of improved liquidity and investor confidence. The mainstream VFEX All Share Index gained a staggering 4.51% to close at 101.66 points, with gains driven by 7 risers which outweighed 1 laggard. The All Share Index was rebased to 100 at the beginning of the year to account for the six listings in 2023. The All Share Index suffered a -2.3% loss in May, a worse off position from the -1.4% decline registered in April. On a YTD basis, the VFEX All Share Index boasts of a 1.7% return. An aggregate of US$1,543,187 exchanged hands on VFEX in the week under review, down from US$1,182,355 traded in the previous week.

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, cutting 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 The new MPS highlighted that the currency auction market has been replaced by the Interbank market, which will be used to liquidate all ZWL balances into Zimbabwe Gold (ZiG), the new currency. In the week under review, the ZiG depreciated by -0.84% against the US$ to close at 13.43. The exchange rate is computed by dividing the US$ by gold price per milligram.

An aggregate of 31 stocks exchanged hands in the week under review, with 20 emerging risers and these were led by Hippo which gained 67.1% to settle at 483c. Meikles extended gains to a 4th straight week on adding 36.6% to close at 381c, followed by Star Africa which recouped prior week’s losses on rising 27% to settle at 1c. Nampak recouped prior week’s losses on gaining 26.6% to close at 44c, while Dairibord went up for a 4th consecutive week by a further 23.1% to settle at 80c. OK Zim set off prior week’s losses on surging 15.5% to close at 45c, trailed by Fidelity which rose for a 3rd straight week by a further 14.7% to settle at 86c. Willdale firmed by 12.5% to close at 5c while AFDIS buttressed prior week’s gains by a further 11.4% to settle at 260c. EcoCash rose by 11.1% to settle at 20c, capping off the Top 10 risers’ set.

On the downside, an aggregate of 9 counters partially countered risers. Proplastics performed the worst in the week on dipping -15% to close at 37c, trailed by BAT which shed off -11.4% to settle at 2200c. ZHL fell for a 4th straight week by a further -7.2% to close at 32c while ZBFH countered prior week’s gains on easing -5% to settle at 190c. Ariston extended prior week’s losses by a further -2.3% to close at 4c, followed by Zimpapers which retreated by -0.1% to settle at 5c. Tanganda extended prior week’s losses by a further -0.1% to close at 145c while FBCH partially set off prior week’s gains on softening -0.05% to settle at 184c. CBZ extended losses to a 3rd consecutive week by a further -0.0003% to close at 184c, capping off the laggards’ pack.-EQUITY-AXIS