ZSE Market Commentary 13 June 2024

Heavy and mid-cap counters lift the market…

Gains in heavy and midcap counters lifted the market in Thursday’s session. The primary All Share Index rose 3.30% to 110.03pts while, the Blue-Chip Index firmed up 4.28% to 113.74pts. The Agriculture Index went up 0.23% to close at 96.15pts as the Mid Cap Index added 2.07% to 109.16pts. Hotelier Meikles led the top performers of the day on a 14.99% jump to $4.7065 while, RTG surged 13.64% to close at $0.2500. Fintech group Ecocash Holdings grew 9.01% to $0.1800 while, retailer OK Zimbabwe charged 8.17% to settle at $0.4987.

Proplastics capped the top five winners of the day on a 7.09% uplift to end pegged at $0.4300. Star Africa was the sole faller of the day as it tumbled 2.31% to settle at $0.0082. The market closed with a positive breadth of fourteen after fifteen counters recorded gains against one that faltered.

Activity aggregates were mixed in the session as volumes traded plunged 91.30% to 2.78m shares while, turnover grew 4.26% to $7.75m. The top volume drivers of the day were Econet (59.48%), Delta (18.42%) and Star Africa (8.76%). Delta contributed 59.57% to the total value traded while, Econet accounted for 35.67% of the same. Morgan & Co Multi Sector ETF added 10.53% to close at $0.4200 while, OMTT ETF climbed up 3.42% to end the day pegged at $0 .1086. A total of 61,820 units exchanged hands in the session.

VFEX reverses prior session gains…

The VFEX market reversed prior session’s gains as the All-Share Index declined 0.45% to 99.45pts. Axia led the laggards of the day on a 1.01% retreat to $0.0978, followed by lnnscor that eased 0.92% to $0.4512. Padenga declined 0.31% to $0.1595. Partially mitigating today’s losses was banking group First Capital that ticked up 10.00% to $0.0330. Fast foods group Simbisa edged up 0.11% to end the day pegged at $0.3500.

Activity aggregates faltered in the session as volumes traded 37,726 53.07 dropped 53.07% to 37,726 shares while, turnover slipped 47.62% to $14,399.74. lnnscor and Simbisa anchored today’s aggregates after contributing a shared 86.53% to the total volumes traded and 98.21% to the total value traded.
Bulls n Bears

ZSE Sets New Record High as VFEX Recovers Amid Ex-Rate Appreciation

The ZSE climbed to a new record high on Thursday following news of an expected removal of capital gains tax, a decision that incentivizes avid investors. The mainstream ZSE All Share Index countered prior session’s losses, surging by 3.3% to a record high of 110.03 points. Gains were spun between market heavies and medium caps, while penny stocks remain constant since the rebasing of indices.

Following the introduction of a new currency, the ZiG, which replaced the ZWL, 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. Since the rebasing of indices, the All Share Index boasts of a 10% nominal return, which converts to 10.7% in US$ terms. On a month-to-date basis, the ZSE is up 8.9%, buttressing a nominal return of 2.28% garnered in May.

The US$ denominated bourse, VFEX, recouped prior session’s losses as oscillatory performance persists amid uncertainties around the prospects of the market in the wake of projected new measures. This follows an announcement about plans of turning the bourse into a pan-African trading hub this year, including the exchange of African currencies and commodities.

The mainstream VFEX All Share Index gained 0.28% today to close at 100.44 points, with gains driven by 2 risers which outweighed 3 laggards. The All Share Index was rebased to 100 at the end of 2023 following the addition of six new listings in 2023. Since the beginning of June, the All Share Index has garnered a 3.3%, which compares to a -2.3% loss suffered in May. On a year-to-date basis, VFEX boasts of a positive 0.4% return. An aggregate of US$14,399 exchanged hands in today’s session, significantly down from US$27,489 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 0.11% against the US$ to close at 13.48. The Central Bank computes the exchange rate by dividing the US$ by gold price per milligram.

An aggregate of 20 counters exchanged hands in today’s session, with 4 sailing stable while 15 emerged risers. Meikles came out as the top performer in the session on rising 14.99% to settle at 470.65c, buttressing prior session’s gains while RTG firmed by 13.64% to close at 25c. EcoCash Holdings partially recouped prior session’s losses on gaining 9.01% to settle at 18c, followed by OK Zim which went up by 8.17% to close at 49.87c. Proplastics rose for a 3rd straight session by a further 7.09% to settle at 43c after recording a 96% decline in export volumes, capping off the Top 5 risers’ set.
On the downside, Star Africa emerged a laggard, extending prior session’s losses by a further -2.31% to close at 0.82c.

Total turnover rose by 4% from prior session’s record to ZiG7.75 million today despite a -91% decrease in overall shares traded. Delta led turnover contributors in the session, contributing 60% of the aggregate turnover and was trailed by Econet, Masimba, Dairibord and OK Zim in that respective order. Foreign inflows contributed 35.2% to aggregate turnover while outflows held a foothold of 33.9%.