eBusiness Weekly
Business Writer
The Zimbabwe Stock Exchange (ZSE) is now trading in uncharted waters after its market capitalisation breached its previous high of $1,513 trillion on Thursday last week.
The previous high was recorded on November 11, 2021.
At the close of trading on Wednesday this week, the ZSE’s market capitalisation had reached $1,617 trillion, further consolidating its upward trajectory.
Wednesday’s gain was the seventh consecutive gain for the equities market.
Since the beginning of February this year, the market has gained approximately $165 billion in value.
The rally has been buoyed by gains in blue-chip stocks such as Econet, which has gained 34.12 percent since the beginning of the year and is now valued at approximately $296 billion as of yesterday. In its last trading update for the third quarter ending November 30, 2021, the digital services provider said data and voice traffic grew by 43 percent and 6 percent respectively compared to previous year. Econet is in a good space to benefit from the shift to remote working and learning.
Delta has also gained a similar 41.51 percent to a market capitalisation of $297 billion as of yesterday. The beverages giant recorded double-digit volumes growth for most of its business units according to its trading update for the third quarter to December 31, 2021.
Company Secretary Alex Makamure said the period was characterised by improved consumer disposable incomes driven by increased mining activity improved agricultural output, infrastructure projects and payments of bonuses and salaries in foreign currency.
Among big-cap stocks, Simbisa Brands has been the top performer having gained 66,8 percent in value since the beginning of the year. Simbisa has enjoyed a lot of traction following the introduction of its loyalty platform, “Innbucks”. While Innbucks is seen as a platform meant to reward customers with discounts on every purchase, its ability to offer US dollar wallet transfers has the potential to disrupt the mobile money and financial services sector.
Axia with a 132,95 percent share price gain is also a front runner, having pipped to the number one spot by Zeco up 316,7 percent.
Zeco was this week forced to reveal a material transaction conducted without the following listings procedures. The counter which was over the years known as a Rolling Stock company has now switched to become a Residential and Commercial Property Investment and Development Company. ZECO in its statement said the new strategic focus was done through the disposal of the company’s Rolling Stock Assets for an amount of US$4,5 million and the purchase of a piece of land measuring 36,395 square metres for a consideration of US$2,150 million.
“The new strategic focus will enable the company to participate in the growth prospects of the Property Development sector which appears to have better prospects than the rolling stock industry,” John Mwinjilo, the company’s secretary revealed.
Post Monetary Policy Statement
The ZSE upward trend continued post the release of the Monetary Policy Statement early this week. The continued rally might mean investors still see the equities market as a home to either hedge against currency depreciation and inflation. Alternatively, investors are positioning themselves for good returns in the market.
Stockbrokers at IH Securities said the ZSE is likely to maintain its role as both a currency and inflationary hedge despite demanding valuations in the event of further dislocations in the monetary space.
“We encourage investors to be highly selective on stock picking, potentially waiting for temporary weakness/profit taking to accumulate into quality names,” reads part IH Securities’ 2022 Monetary Policy Review.
