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Enacy Mapakame
The Zimbabwe Stock Exchange has continued with its bull run as investors continue to pile on into the safe haven of equities amid a glut of negative economic out turns resulting in counters swinging back to year-to date gains.
Currently, the economy is going through macro-economic pressures, key among them, foreign currency shortages, infrastructure gaps, erratic power and water supplies subsequently leading to low production levels.
In the past week, the capital, Harare had dry taps as city fathers struggle to secure water treatment chemicals, further worsening the industry production, which is already affected by power outages.
The economy is also facing serious inflationary pressures as the illegal parallel market exchange rates sky-rocket, eroding disposable incomes.
Under such a scenario, investors are seeking cover on the stock market. In the past week alone, demand rose sharply as buying pressure continued with many investors pursuing the stock market route as a hedge against uncertainties.
Most stocks that had been on a downward trend in the last month, suddenly turned to winning ways subsequently over-turning year to date losses to gains.
Figures from the ZSE show that, of all the active counters, only one counter — Fidelity was still in YTD losses as of Wednesday with a 2,9 percent below year opening price. Year-on-year, Fidelity is down 17,5 percent, remaining the only counter with negative returns on a year on year basis.
As of end of Wednesday session, all the other active counters had swung into YTD gains with the exception of ZECO Holdings that hardly trades at all and has been stagnant at 0,02 cents.
Overall, the market rally experienced in the past week has seen total market cap jump 66 percent on a year to date basis.
Even the Mining Index has recorded gains to 39 percent increase YTD. One of the resources counter, Falgold, resumed trades after the ZSE lifted its suspension after fulfilling listing requirements. The gold producer was suspended from trading on February 5, 2019 and suspension was lifted on September 23, 2019.
The ZSE All Share and ZSE Top 10 indices have also 66 percent and 60 percent respectively, above year opening levels.
Leading the YTD gains are Medtech with a 1 900 percent growth followed by Africa Sun that has put 367 percent of value since beginning of the year.
Largest financial services group, Old Mutual, has also been among the top five with a 341 percent increase while CBZ rose 312 percent from year opening price.
Wrapping up the top five YTD risers, RTG put on 307 percent of value. With the obtaining inflationary pressures, stocks are anticipated to continue on an upward trend as investors turn to them for safety.
Bongani Ndlovu