ZSE Market Commentary 24 June 2024
Stocks edge higher as heavies lead the market charge…
The ZSE market continued to edge higher in the session as the All-Share Index rose 1.12% at 117.81pts while, the Blue-Chip Index was 1.21% firmer at 123.22pts.
Mid Cap Index was 0.26% weaker at 111.22pts. Tea producer Tanganda led the gainers of the day on a 14.98% surge to $2.1065 while, TSL trailed behind as it soared 14.42% to $1.2587. Telecommunications group Econet buttressed prior session’s gains as it advanced 9.34% to $2.2001 while, banking group ZB Financial Holdings ticked up 2.71% to $1.9000. FBC to $1.9988. Partially weighing down the market was sugar proces_sor Star Africa that plummeted 13.43% to settle at $0.0070 while, property concern First Mutual Properties slipped 9.52% to $0.3800. Ecocash trimmed 7.48% to end pegged at $0.1851 as retail group Meikles dipped 3.26% to close trading at a VWAP of $4.6920. General Beltings capped the top five worst performers of the day as it tumbled 0.79% to $0.0500.
Activity aggregates continued to falter in the session as volume traded tumbled 60.43% to 6.36m shares while, turnover was 32.12% lower at $5 .63m. The duo of Star Africa and Ecocash drove the volume aggregate as they contributed a combined 86.22% of the total. In the turnover category, activity was mainly confined in Delta that claimed 82.88% of the total traded. In the ETF category, only two funds registered price movements, despite having traded mixed. The Old Mutual Top Ten ETF was 2.88% lower at $0.1117 as it postponed its EGM which was scheduled last week, where it intended to seek approval to delist the fund from the bourse. The Morgan & CO Made in Zim ETF notched up 11.11% to $0.0100. In the REIT category, the Tigere REIT dropped 1.48% to $0.6207 on 173,833 units.-efesecurities- Bulls n Bears
ZSE Bullish in Early Week Trades as VFEX Succumbs to Uncertainties Amid Ex-Rate Volatility
The ZSE climbed to a new high in early week trades despite a slow-down in demand amid sell-offs in medium caps following an alarming currency devaluation late last week. The sustained growth is buttressed by increased local currency liquidity in the economy. The mainstream ZSE All Share Index garnered a nominal 1.12% growth today to close at a new record high of 117.81 points, with gains driven by market heavies which outweighed a mild decline in medium caps while penny stocks remain constant since the rebasing of indices.
Following the introduction of a new currency, the ZiG, which replaced the ZWL, the ZSE changed its functional currency to ZiG, and rebased all indices to 100 on the 8th of April in a bid to effectively reflect the effect of the new currency on financial markets. Likewise, all share prices were also converted to ZiG at a rate of 2,498.65 upon introduction. Since the rebasing of indices, the All Share Index boasts of a 16.6% nominal return, which converts to 17.7% in US$ terms. On a month-to-date basis, the ZSE is up 17.8%, buttressing a nominal return of 2.28% garnered in May.
The US$ denominated bourse, VFEX, opened the new week on a negative note, partially countering prior session’s losses as the market continues to oscillate due to mixed investor sentiment ahead of new developments scheduled for late this year, which will see the market as a pan-African hub. The mainstream VFEX All Share Index shed off -0.49% to close at 100.06 points, with losses driven by 5 laggards which outweighed 2 risers. The All Share Index was rebased to 100 at the end of 2023 following the addition of six new listings in 2023. On the upside, since the beginning of June, the All Share Index has garnered a 2.9% growth, which compares to a -2.3% loss suffered in May. On a year-to-date basis, VFEX is up 0.1%. An aggregate of US$34,314 exchanged hands in today’s session, down from US$146,455 traded in the prior session.
On the currency markets, the Zimbabwe government introduced a new currency on the 5th of April 2024, backed by gold reserves and foreign currency. The Central Bank also announced new monetary policy measures on the same day, further tightening its stance on money supply while, however, slushing borrowing costs from 130% to 20%. The new MPS highlighted that the currency auction market has been replaced by the Interbank market, which will be used to liquidate all ZWL balances into Zimbabwe Gold (ZiG), the new currency. Today, the ZiG depreciated by 0.07% against the US$ to close at 13.58. The Central Bank computes the exchange rate by dividing the US$ by gold price per milligram.
An aggregate of 22 counters exchanged hands in today’s session, with 3 sailing stable while 11 emerged risers. Tanganda Tea Company came out as the top performer in the session on gaining 14.98% to settle at 210.65c, extending the positive streak to a 5th straight session while TSL firmed by 14.42% to close at 125.87c. Econet rose for a 6th consecutive session by a further 9.34% to settle at 220.01c, followed by ZBFH which buttressed prior session’s gains on adding 2.71% to close at 190c. FBCH recouped prior session’s losses on gaining 2.42% to settle at 199.88c, capping off the Top 5 risers’ set.
On the downside, a total of 8 counters partially weighed on the market. Star Africa performed the worst in the session on dwindling -13.43% to close at 0.70c, reversing prior session’s gains while FMP retreated by -9.52% to settle at 38c. EcoCash Holdings fell for a 3rd straight session by a further -7.48% to close at 18.51c, trailed by Meikles which lost lost ground by -3.26% to settle at 469.20c. General Beltings shed off -0.79% to close at 5c, capping off the Top 5 laggards’ pack.
Total turnover fell by -32% from prior session’s record to ZiG5.63 million today against a -60% decline in overall shares traded. Delta led turnover contributors in the session, contributing 58% of the aggregate turnover and was trailed by EcoCash Holdings, Tanganda Tea Company, Meikles and Proplastics in that respective order. Foreign inflows contributed 43% to aggregate turnover today while outflows held a foothold of 8%.-Equity-Axis