\u2022\tZSE remains resilient amid currency loss, reaches new record high
\n\u2022\tVFEX succumbs to sell-offs amid uncertainty
\n\u2022\tZiG devalues to a negative position for the first time since inception<\/p>\n
The ZSE closed the week under review at a record month-to-date performance in real terms as increased liquidity, along with the planned removal of capital gains tax fueled demand for stocks. The bourse remained resilient in the face of currency devaluation, as the ZiG plunged to a negative position since inception, for the first time. <\/p>\n
The ZiG-US$ exchange rate is typically pegged to global gold prices, and since the introduction of ZiG the gold price has gone up while ZiG plunges, reflecting the impact of demand and supply matrices influenced by money supply. On a week-on-week basis to Friday, the ZSE All Share Index gained a widened magnitude of 5.24%, compared to prior week, to close at 116.5 points, with gains driven by market heavies and medium caps while penny stocks remain constant since the rebasing of indices. 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.<\/p>\n
Likewise, all share prices were also converted to ZiG at a rate of 2,498.65. Since then, the ZSE has gained 16.5% in nominal terms, which converts to 16.3% in US$ terms. On a month-to-date basis, the ZSE is up 15.3%, buttressing a nominal return of 2.28% garnered in May.<\/p>\n
The US$ denominated bourse, VFEX, remained oscillatory in the week under review as investor sentiment remains mixed ahead of new developments scheduled for late this year, which will see the market as a pan-African hub. This will see the market trading African currencies and commodities. The mainstream VFEX All Share Index shed off -0.63% to close at 100.56 points, with losses driven by 7 laggards which outweighed 2 risers. <\/p>\n
The All Share Index was rebased to 100 at the beginning of the year to account for the six listings in 2023. On the upside, since the beginning of June, the All Share Index has gained 3.4%, which compares to a -2.3% loss suffered in May. On a year-to-date basis, VFEX is up 0.6%. An aggregate of US$776,401 exchanged hands on VFEX in the week under review, down from US$727,415 traded in the previous week.
\nOn the currency markets, the Zimbabwe government introduced the ZiG on the 5th of April 2024, backed by gold reserves and foreign currency reserves.<\/p>\n
The Central Bank also announced new monetary policy measures on the same day, further tightening its stance on money supply while, however, cutting borrowing costs from 130% to 20%. The new measures also saw the replacement of currency auction market with the Interbank market, which was used to liquidate all ZWL balances into ZiG. In the week under review, the ZiG depreciated by -0.81% against the US$ to close at 13.59. The exchange rate is computed by dividing the US$ by gold price per milligram.\t<\/p>\n
An aggregate of 31 stocks exchanged hands in the week under review, with 20 emerging risers and these were led by NTS which went up by 95.2% to settle at 25c. CBZ buttressed prior week\u2019s gains by a further 36.6% to close at 500c, followed by AFDIS which firmed by 34.6% to settle at 350c. The duo of Proplastics and Tanganda Tea Company extended prior week\u2019s gains by a further 31.3% and 23.8% respectively to close at 63c and 183c apiece. Econet recouped prior week\u2019s losses on surging 20.5% to settle at 201c while Dairibord extended gains to a 6th straight week on notching 18.4% to close at 96c. Fidelity rose for a 5th consecutive week by a further 15% to settle at 118c, trailed by ARTD which set off prior week\u2019s losses on rising 11.3% to close at 9c. Turnall went up for a 3rd straight week by a further 8.8% to settle at 3c, capping off the Top 10 risers\u2019 set.<\/p>\n
On the downside, an aggregate of 7 counters partially countered risers. RTG performed the worst in the week under review on dipping -15% to close at 21c, reversing prior week\u2019s gains while ZHL countered prior week\u2019s performance on retreating -9.3% to settle at 29c. BAT fell for a 3rd straight week by a further -8.5% to close at 2000c, trailed by OK Zim which partially set off prior week\u2019s gains on easing -1.2% to settle at 49c. Star Africa extended prior week\u2019s losses by a further -0.6% to close at 1c while EcoCash Holdings reversed prior week\u2019s gains on softening -0.2% to settle at 20c. Mashhold extended prior week\u2019s losses by a further -0.1% to close at 14c, capping off the laggards\u2019 pack.-Equity-Axis<\/p>\n","protected":false},"excerpt":{"rendered":"
\u2022 ZSE remains resilient amid currency loss, reaches new record high \u2022 VFEX succumbs to sell-offs amid uncertainty \u2022 ZiG devalues to a negative position for the first time since inception The ZSE closed the week under review at a record month-to-date performance in real terms as increased liquidity, along with the planned removal of […]<\/p>\n","protected":false},"author":1,"featured_media":2638,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-3115","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\/3115","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=3115"}],"version-history":[{"count":1,"href":"https:\/\/ctrade.co.zw\/index.php?rest_route=\/wp\/v2\/posts\/3115\/revisions"}],"predecessor-version":[{"id":3116,"href":"https:\/\/ctrade.co.zw\/index.php?rest_route=\/wp\/v2\/posts\/3115\/revisions\/3116"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ctrade.co.zw\/index.php?rest_route=\/wp\/v2\/media\/2638"}],"wp:attachment":[{"href":"https:\/\/ctrade.co.zw\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3115"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ctrade.co.zw\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3115"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ctrade.co.zw\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3115"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}