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Enacy Mapakame
The Zimbabwe Stock Exchange (ZSE) surged in the week to Wednesday with all the four benchmark indices closing in the positive. Economic uncertainty due to inflationary pressures also drove investors to pursue stocks as a safe haven of investment.
According to figures from the Zimbabwe National Statistics Agency (ZIMSTAT), the annual rate of inflation for December 2018 gained 11,08 percentage points to 42,09 percent, from November’s 31,01 percent.
Since September 2018, prices of goods and services have been rising chasing the foreign currency rates on the parallel market, at some point hitting 400 percent. In some instances, service providers are accepting USD only for transactions.
Overall, market value for the week jumped 6 percent to $21 billion driven by gains in the market’s top cap counters.
The primary ZSE All Share Index gained 10 points or 6,87 percent to 159,24 points while the ZSE Top 10 Index paced the fastest with a 7,59 percent gain to 160,66 points.
Since beginning of the year, the index has put on 10 percent of value.
The Industrials Index rose 6,9 percent to close pegged at 531,66 points on gains across the board.
The Mining Index of three active counters also closed in the black after adding 2,51 percent to 212,19 points on gains in the resources groups.
Of the four benchmark indices, the resources index is, however, the only one that has lost value since beginning of the year with a 6,82 percent decline.
Delta, Old Mutual, Econet and Cassava were among the top value and volume drivers for the week.
Clothing retailer, Edgars, headlined the risers for the week with a 43,64 percent surge to 15,8 cents followed by Art that put on 23,97 percent to 10,55 cents.
At 6,4 cents, FCB gained 20,75 percent while diversified media group, Zimpapers ticked 20 percent to close pegged at 4,08 cents.
Hospitality group, Meikles capped the week’s top five risers with an 18,18 percent gain to 65 cents.
At 1 cent, the only listed brick making firm, Willdale increased by 14,94 percent.
Insurance group, FML added 12,82 percent of value to 13,99 cents while beverages giant, Delta rose by 12,28 percent to close pegged at $3,20.
Gains in Delta saw the stock moving up again to its long held position of the biggest stock by market capitalisation with a total value of $4,058 billion ahead of Econet’s $4,050 billion.
Cassava remains third largest with a total market value of $4,041 billion while Innscor and BAT have maintained their positions of fourth and fifth largest counters in that order.
During the week under review, Innscor gained by 12,71 percent to $2,05 while retail giant, OK Zimbabwe added 11,8 percent to 32,4 cents.
Property firm, ZPI put on 11,51 percent of value to close pegged at 2,81 cents while Old Mutual and Padenga rose by 8,5 percent to $8,99 and 8,61 percent to $1.
The market was short of fallers in the week. Afdis, Cafca and Hippo remained flat at $1,53, $1,03 and $1,71 respectively.
Also maintaining prior week prices were Lafarge, Masimba, Powerspeed and RTG that closed pegged at $1,33, 7,56 cents, 14 cents and 2,39 cents respectively.
On the resources side, Bindura and RioZim inched up 6,55 percent to 7,48 cents and 1,07 percent to $1,89 respectively.
For economies that rely on commodities such as Zimbabwe and the Sub Sahara Africa region, performance of commodities play a key role in the route their economies take.
According to the World Bank’s Precious Metals Price Index, metals are forecast to decline marginally in 2019, following the expected 2 percent loss in 2018.
Gold prices are projected to edge marginally lower and silver prices to tick slightly higher, while platinum prices are anticipated to rebound moderately.
Key risks to this outlook are United States monetary policy, the strength of the USD as well as global demand.
Bongani Ndlovu