ZIMBABWE\u2019S stock exchanges experienced significant market capitalisation losses last week owing to uncertainty over government\u2019s proposed \u201cstructured currency\u201d, liquidity crisis and a decline in trading volumes, a new report has shown.<\/p>\n
In its report for the week ending February 17, 2024, Zimbabwe Stock Exchange (ZSE) Technician, an organisation analysing the performance of the country\u2019s exchanges, said ZSE lost just over 10%, and Victoria Falls Stock Exchange (VFEX) lost 3%.<\/p>\n
\u201cThis week was bearish; there were losers than gainers in both exchanges resulting in significant losses. If we combine both exchanges, they lost approximately 10,2%. The poor performance can be attributed to many factors including liquidity crisis, uncertainty over structured currency (and) decline in trading volumes,\u201d ZSE Technician said.<\/p>\n
This comes as the Finance, Economic Development and Investment Promotion minister Mthuli Ncube announced last week plans to create a \u201cstructured currency\u201d whereby the currency will be linked to a commodity and the creation of a currency board to monitor it.<\/p>\n
No further information has been availed since the announcement, hence the uncertainty.<\/p>\n
The ZSE market cap declined by 11% to ZWL$38,25 trillion. In United States dollar terms, the bourse lost 13% to US$2,185 billion using a parallel rate of ZWL$17 500. The VEFX market cap declined by 3% to US$1,162 billion.<\/p>\n
In the period under review, last week\u2019s volumes added approximately 9,38% to the total volumes of the year to reach US$13,65 million total traded value on ZSE.<\/p>\n
For the week under review, total traded value on ZSE stood at US$1,17 million, a 60,6% change in weekly volume.<\/p>\n
The report shows that 67% of last week\u2019s volumes was channelled towards three counters namely Dairibord Zimbabwe, Delta Corporation and Zimre Holdings Limited (ZHL).<\/p>\n
\u201cThe reasons behind this volume structure can be explained by Mutapa Investment acquisition in ZHL, Delta reversal resulting in panic selling and profit collection,\u201d it said.<\/p>\n
VFEX volume increased by 99% from last week, and added 37,6% to the total traded volume to reach US$5,3 million. Simbisa remains the most traded stock since the beginning of 2024 with a market dominance of about 32%.<\/p>\n
Africa Sun dominated 76% of the weekly volumes.<\/p>\n
The report further notes that the continued depreciation of the local currency has negatively impacted the exchange rate premium, which has crashed the markets since 2021.<\/p>\n
Exchange rate premium determines the direction of markets in Zimbabwe. It represents many economic indicators that affect capital markets.<\/p>\n
According to the report, the downtrend in exchange premium in its monthly close chart declined to 60%, from 86% at the end of December 2023. By February 16, it was at 38% and both ZSE and VFEX were in a downtrend.<\/p>\n
The ZSE Technician said CBZ maintained its market cap over a week but Delta and Econet were significantly losing. Econet is now only 64% of CBZ Holdings and 39% of Delta. Small and medium cap improved 35% over a month and the top 3 reduced their dominance by 23%.<\/p>\n
At VFEX, WestProp maintained its US$300 million market valuation. Innscor and Simbisa lost about 5% and 10%, respectively.
\nhttps:\/\/www.newsday.co.zw\/business\/article\/200023351\/zse-vfex-suffer-heavy-losses<\/p>\n","protected":false},"excerpt":{"rendered":"
ZIMBABWE\u2019S stock exchanges experienced significant market capitalisation losses last week owing to uncertainty over government\u2019s proposed \u201cstructured currency\u201d, liquidity crisis and a decline in trading volumes, a new report has shown. In its report for the week ending February 17, 2024, Zimbabwe Stock Exchange (ZSE) Technician, an organisation analysing the performance of the country\u2019s exchanges, […]<\/p>\n","protected":false},"author":1,"featured_media":2731,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-2730","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-market-commentary"],"_links":{"self":[{"href":"https:\/\/ctrade.co.zw\/index.php?rest_route=\/wp\/v2\/posts\/2730","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ctrade.co.zw\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ctrade.co.zw\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ctrade.co.zw\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ctrade.co.zw\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2730"}],"version-history":[{"count":1,"href":"https:\/\/ctrade.co.zw\/index.php?rest_route=\/wp\/v2\/posts\/2730\/revisions"}],"predecessor-version":[{"id":2732,"href":"https:\/\/ctrade.co.zw\/index.php?rest_route=\/wp\/v2\/posts\/2730\/revisions\/2732"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ctrade.co.zw\/index.php?rest_route=\/wp\/v2\/media\/2731"}],"wp:attachment":[{"href":"https:\/\/ctrade.co.zw\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2730"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ctrade.co.zw\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2730"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ctrade.co.zw\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2730"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}