• July 16, 2024
• Marketing @ C-TRADE
• Market Commentary

WEEKLY MARKET ROUND UP- : ZSE WEEKLY: ZSE Remains Bullish as VFEX Succumbs to Sell-offs

• ZSE sustains bull-run amid increased money supply
• VFEX succumbs to sell-offs, reverses early-month gains
• ZiG loses ground as gold prices plummet

The ZSE widened the magnitude of gains in week under review amid hopes of local currency appreciation as global gold prices are expected to pick up following the anticipated rates cut by the United States. The mainstream ZSE All Share Index was up by a widened margin of 19.47% on a week-on-week basis to Friday to close at a new all-time high of 175.89 points, with gains driven by market heavies and medium caps while penny stocks remained constant. 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 75.9% in nominal terms, which converts to 73.4% in US$ terms. On a month-to-date basis, the ZSE All Share Index is up 36.7%, buttressing a nominal return of 27.3% garnered in June.

The US$ denominated bourse, VFEX, closed in negative territory in the week under review amid an oscillatory performance fueled by profit-taking induced sell-offs following a bullish performance in June and early July. The mainstream VFEX All Share Index lost ground by -1.08% in the week under review to close at 103.78 points. The All Share Index was rebased to 100 at the beginning of the year to account for the six listings in 2023. The VFEX All Share Index is 1.1% up since the beginning of the month, buttressing a 5.6% growth registered in June. On a year-to-date basis, VFEX boasts of a 3.8% return. An aggregate of US$161,277 exchanged hands on VFEX in the week under review, down from US$2,240,017 traded in the prior week.

On the currency markets, the Zimbabwe government introduced the ZiG on the 5th of April 2024, backed by gold reserves and foreign currency reserves. 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 measures also saw the replacement of currency auction market with the Interbank market, which was used to liquidate all ZWL balances into ZiG. In the week under review, the ZiG depreciated by -0.5% against the US$ to close at 13.76. The exchange rate is computed by dividing the US$ by gold price per milligram.

An aggregate of 35 stocks exchanged hands in the week under review, with 31 emerging risers and these were led by Tanganda Tea Company which surged by 75.6% to settle at 414c. EcoCash Holdings buttressed prior week’s gains by a further 38.9% to close at 44c, followed by TSL which went up for a 3rd straight week by a further 32.2% to settle at 198c. BAT rose for a 3rd consecutive week by a further 32.1% to close at 4000c while Nampak went up for a 4th straight week by a further 31.7% to settle at 115c. CBZ rose for a 5th consecutive week by a further 27.8% to close at 1265c, trailed by Delta which extended gains to a 8th straight week by a further 27.7% to settle at 1286c. ZBFH gained 27.2% to close at 716c, extending the streak to a 4th straight week while Dairibord buttressed prior week’s gains by a further 24.8% to settle at 132c. Meikles buttressed prior week’s gains by a further 19.9% to settle at 642c, capping off the Top 10 risers’ set.

On the downside, an aggregate of 3 counters partially countered risers. FML performed the worst in the session on slumping -2.4% to close at 200c, trailed by Willdale which extended prior week’s losses by a further -0.9% to settle at 4c. FMP shed off -0.1% to close at 38c, capping off the laggards’ pack.
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