eBusiness Weekly
Given the festive holidays that we experienced a fortnight ago, this week’s review will be from December 20, 2018 up to January 2, 2019.
The trend has, however, not changed from what we witnessed since October 22, 2018, when the market reached an all-time high of 611,59 and a year-to-date gain of 83,65 percent.
Three of the ZSE’s indices traded on the downside, with the exception of the Mining Index which gained a strong 13.03 percent to 227,71.
The main Industrials Index lost 3,13 percent, the All Share Index eased 2,87 percent, but the biggest loser was the Top 10 Index down 4,57 percent to 143,16.
The weakening trend was also reflected in the market’s overall capitalisation, which lost 2,92 percent to $19,2 billion, still twice bigger than the 2019 National Budget of approximately $8 billion.
To some this points to a market that is overvalued.
From around mid-year 2018, local investors have been looking at the stock market as a safe haven from the loss of value in bond notes and RTGS balances on the illegal foreign currency market, but with such rates having stabilised between 300 and 350 percent, there is no need to hedge, at least for some, hence the downward trend we are witnessing now.
In some cases, it’s not about where the rates are; 50 percent or 500 percent. It’s about stability. Certainty allows investors to plan, to think about the return to be earned and also time to properly value assets.
And by some measure there has been that stability and investors can do some kind of valuation, buy or sale as happening now.
Movers and Shakers
Dairibord was the week’s biggest loser, after shedding 17,75 percent to 16,45 cents, followed by FBCH with the banking group dropping 14,29 percent to 30 cents.
Dawn Properties, CBZ and Masimba completed the top five fallers losing 10,71 percent, 9,06 percent and 7,8 percent respectively.
Though not among the top five fallers, big cap stocks were also not in favour as seen in the ZSE Top 10 Index which dropped 4,57 percent to 143,16.
Delta the market’s 3rd biggest stock by market capitalisation shed 2,95 percent. It will be interesting how the share price would have reacted to the pricing storm its directors have brewed following the decision to charge US$ for its products. Government was expected to react by today.
The period, however, saw very strong gains being recorded with Bindura the top riser up 54,92 percent to 9,45 cents.
The rally in Bindura Nickel Corporation follows news that there is going to be shareholder changes in the near future.
In a cautionary statement to shareholders, BNC announced that it had reached a deal with a potential buyer for a 74,73 percent shareholding belonging to Asa Resource Group.
The buyer is a United Kingdom-based nickel company with complementary interests in Southern Africa according to the cautionary statement.
Also finding favour with investors during the period under review was Lafarge up 43,01 percent, as well as NTS up 20 percent to 1,8 cents.
NTS recently reported a revenue increase of 23 percent while profit before tax increased by 39 percent. Media house Zimpapers also put on 20 percent to 2,88 cents while cement maker PPC added 18,01 percent to 190 cents.
