ZSE Market Commentary 01 July 2024
ZSE and VFEX in Positive Early Month Sail as ZiG Stabilizes
The ZSE widened gains in early week and early month trades, extending the bullish trajectory from June as improved local currency liquidity and a stable inflation fueled demand for stocks. The mainstream ZSE All Share Index firmed by 2.03% on Monday to close at a new record high of 131.25 points, with gains driven by market heavies which outweighed a decline in medium caps while penny stocks sailed stable. 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 31.3% nominal return, which converts to 30% in US$ terms. In June, the ZSE gained 27.3%, buttressing a nominal return of 2.28% garnered in May.
The US$ denominated bourse, VFEX, opened the new week and month on a positive note, climbing to a new high as hopes of increased liquidity in the medium-term fueled demand for stocks. The mainstream VFEX All Share Index surged by 0.34% today to close at a 4-month high of 103.04 points, with gains driven by 4 risers which outweighed 5 laggards. The All Share Index was rebased to 100 at the end of 2023 following the addition of six new listings in 2023. In the just ended month of June, VFEX grew by 5.6% which compares to a -2.3% loss suffered in May. On a year-to-date basis, VFEX is up 3%. An aggregate of US$106,340 exchanged hands in today’s session, up from US$57,141 traded in the prior session.
On the currency markets, the Zimbabwe government introduced a new currency on the 5th of April 2024, backed by gold reserves and foreign currency. The Central Bank also announced new monetary policy measures on the same day, further tightening its stance on money supply while, however, slushing borrowing costs from 130% to 20%. The new MPS highlighted that the currency auction market has been replaced by the Interbank market, which will be used to liquidate all ZWL balances into Zimbabwe Gold (ZiG), the new currency. Today, the ZiG remained unchanged against the US$ as gold prices stabilized. The Central Bank computes the exchange rate by dividing the US$ by gold price per milligram.
An aggregate of 19 counters exchanged hands in today’s session, with 2 sailing stable while 13 emerged risers. ZBFH came out as the top performer in the session on gaining 15% to settle at 322c, followed by TSL which buttressed prior session’s gains by a further 14.99% to close at 159.95c. Nampak extended prior session’s gains by a further 13.3% to settle at 51c while EcoCash Holdings closed at 20.65c after rising 10.64%. CBZ buttressed prior session’s gains by a further 9.65% to settle at 805c, capping off the Top 5 risers’ set.
On the downside, a total of 4 counters partially weighed on the market, with Willdale performing the worst on plunging -0.97% to close at 3.96c. OK Zim extended prior session’s losses by a further -0.71% to settle at 52.84c, trailed by RioZim which shed off -0.08% to close at 63c. Ariston reversed prior session’s gains on easing -0.05% to close at 4c, capping off the laggards’ pack.
Total turnover fell by -82% from prior session’s record to ZiG1.73 million today against a -55% decline in overall shares traded. Econet led turnover contributors in the session, contributing 73% of the aggregate turnover and was trailed by Delta, Meikles, CBZ and EcoCash Holdings in that respective order. Foreign inflows contributed 12% to aggregate turnover today while outflows held a foothold of 61%.-Equity-Axis
COMPANY EVENT
Dairibord 29th AGM to be held online @ https://escrowagm.com/eagmZim/Login.aspx
on the 10th of July 2024 at 1200 Hours
CBZ 32nd AGM to be held online @ https://polling.fts-net.com/Identity/Account/Login
on Friday, 19 July 2024 at 1000 Hours
AFDIS 74th AGM to be held at St. Marnock’s, Lomagundi Road, Stapleford, Harare, Zimbabwe on Wednesday, 24 July 2024 at 1200 Hours
(Equity-Axis)