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Enacy Mapakame
Bears dominated the Zimbabwe Stock Exchange (ZSE) with all benchmark indices closing the week in the negative as the market responds to the recent changes in currency reforms.
Last week, Government announced the scrapping of the multi-currency system for local transactions under the Statutory Instrument 142 of 2019.
Prior the announcement, the stock market had experienced a 13 week bull run as investors sought cover in safer haven assets against the decline in value of local currency and inflationary pressures.
Annual rate of inflation for May came in at 98 percent.
In the week to Wednesday, the primary indicator, the ZSE All Share Index fell 10,94 percent to 194,2 points as the market succumbed to waning demand.
At 184,83, the ZSE Top 10 Index was 13 percent weaker while the Industrials Index lost 10,85 percent to 648,63 points on losses across the board.
The Mining Index of two active counters fell the heaviest after it retreated by 13,71 percent to 237,92 points on losses in the resources counters.
Cumulatively, investors lost $4 billion or 11,9 percent to $25,6 billion as the market responded to the removal of multi-currency system for domestic transactions in favour of Zimbabwe dollars.
Industry wide, the move has been taken as the step in the right direction that is expected to restore confidence and competitiveness of local industry.
Industrialists argue this was long overdue, and will allow Zimbabweans to use foreign currency only for essential imports as opposed to the multi-currency regime which had been effect for a decade.
Resources group, Bindura was the worst performer of the week after it plunged 36 percent to 7 cents from previous week’s 1 cents.
Masimba gave up 30 percent to 9 cents while Turnall retreated 27 percent to 8 cents. At $1,72, Econet was 24 percent softer compared to the previous week’s $2,29.
The telecoms giant breached the $1 billion revenue mark after it reported revenue for the year to February 28, 2019 jumped 40 percent to $1,14 billion on an 80 percent increase in data usage.
SMS and voice traffic also rose 57 percent and 37 percent respectively, growth that also saw earnings before interest, tax, depreciation and amortisation double to $444,5 million.
Fintech group, Cassava backtracked 22 percent to $1,73 after reporting profit for the four months to February 28, 2019 came in at $9,3 million in the group’s inaugural financials since its listing on the ZSE last year after its demerger from Econet.
Year-on-year, profit jumped 48 percent to $104 million while revenue doubled to $501 million in the year to February 28, 2019. Profit from operations for the year jumped 57 percent to $170 million while profit before tax rose 29 percent to $137 million from $106 million.
At 6,24 cents, property firm, FMP was 20 percent weaker while sugar processor, Hippo fell 17 percent to $1,89.
Other losses were recorded in Simbisa which gave up 15 percent to $1,09 while ZHL and TSL declined 19 percent to 4,89 cents and 16 percent to 50 cents respectively.
Further losses were mitigated by gains in Powerspeed and Edgars that both put on 20 percent each to close at 30 cents and 26,4 cents respectively.
Insurance firm, FML rose 14 percent to 24 cents while banking group, ZB was 10 percent firmer to close the week at 55 cents.
Cigarette manufacturer BAT, advanced 9 percent to $39,50 as it maintains its position as the market’s most expensive stock.
Diversified hospitality group, Meikles, wrapped the week’s gainers after it rose by 3,3 percent to close the week pegged at $1,13 compared to $1,10 recorded in the prior week.
Afdis, Dawn and FCB remained flat at $1,80, 4,84 cents and 6,4 cents respectively.
Also maintaining prior week levels were Getbucks, Mashonaland Holdings and RTG that closed at 12 cents, 4,47 cents and 7,5 cents in that order.
Bongani Ndlovu