• July 25, 2024
• Marketing @ C-TRADE
• Market Commentary

ZSE WEEKLY ROUND UP: ZSE and VFEX in Positive Jumps as Exchange Premium Widens

• ZSE sustains bull-run as investors bet on prospective increased spend
• VFEX in a commendable jump, recouping prior week’s losses
• ZiG stabilizes on interbank as it plummets on parallel market

On the back of increased local currency liquidity along with the expected rate cuts by the Federal Reserve in the United States which is anticipated to expand overall spend and possibly drive inflation, the ZSE widened its bullish momentum in the week under review. The mainstream ZSE All Share Index surged by a widened margin of 13.61% on a week-on-week basis to Friday to close at a new all-time high of 199.83 points, with gains driven by market heavies and medium caps which countered the decline in penny stocks. 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 99.8% in nominal terms, which converts to 97.7% in US$ terms. On a month-to-date basis, the ZSE All Share Index is up 55.3%, buttressing a nominal return of 27.3% garnered in June.

The US$ denominated bourse, VFEX, recovered in the week under review, fully reversing and halting the bear-run stimulated by profit-taking induced sell-offs in the prior week. The mainstream VFEX All Share Index surged by 1.54% in the week under review to close at 105.38 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 2.6% up since the beginning of the month, buttressing the 5.6% growth registered in June. On a year-to-date basis, VFEX boasts of a 5.4% return. An aggregate of US$528,565 exchanged hands on VFEX in the week under review, up from US$161,277 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 appreciated by 0.06% against the US$ to close at 13.72. The exchange rate is computed by dividing the US$ by gold price per milligram.

An aggregate of 34 stocks exchanged hands in the week under review, with 26 emerging risers and these were led by Dairibord which gained 101.1% to settle at 266c. TSL rose for a 4th straight week by a further 54.8% to close at 307c, followed by BAT which went up for a 4th consecutive week by a further 50% to settle at 5998c. ZBFH extended gains to a 5th straight week on adding 46.1% to close at 1045c while Turnall rose for a 3rd consecutive week by a further 37.5% to settle at 6c. Masimba buttressed prior week’s gains on adding 32.2% to close at 205c, trailed by SeedCo which went up for a 5th straight week by a further 30.5% to settle at 321c. Proplastics buttressed prior week’s gains by a further 28.6% to close at 90c while CAFCA rose for a 4th consecutive week by a further 25.5% to settle at 1600c. EcoCash Holdings firmed by a further 19% to settle at 52c, capping off the Top 10 risers’ set.

On the downside, an aggregate of 7 counters partially countered risers. Bridgefort Capital performed the worst in the session on plunging -53.1% to close at 2c, trailed by FMP which extended prior week’s losses by a further -26.6% to settle at 28c. The duo of General Beltings and Star Africa reversed prior week’s gains on easing -10.4% and -9% each to close at 5c and 1c respectively. Mashhold set off prior week’s gains on retreating -4.4% to settle at 24c while Willdale fell for a 3rd straight week by a further -0.1% to close at 4c. Ariston countered prior week’s gains on softening -0.02% to close at 4c, capping off the laggards’ pack.
Equity-Axis