Online Reporter
Tapiwanashe Mangwiro
The Zimbabwe Stock Exchange closed the month of October firmer, with market capitalisation advancing 2,89 percent to ZiG68,02 billion.
The gains came amid a relatively stable exchange rate, which saw the market’s US-dollar equivalent value also inch higher.
In USD terms, market capitalisation rose 1,09 percent to US$2,19 billion, a development dealers said was helped partly by steady liquidity conditions and a general return of mild risk-on positioning by some domestic institutional investors.
The broad market was largely higher across key indices. The mainstream All-Share Index was up 1.45 percent in the month, while the Top 10 added 2,17 percent.
The momentum was however uneven as Turnall led the market with a massive 138 percent surge as Dairibord followed, adding 43 percent in the month. On the negative side, First Mutual fell sharply, losing 54 percent in the period while ART weakened 46 percent.
However, despite firmer capital gains, the value traded declined.
Total value traded on the ZSE retreated 14,28 percent to ZiG388,82 million in the month. Converted to United States dollars, average daily turnover slowed to US$0.58 million, down from US$0,67 million in September.
Delta remained by far the most liquid counter on the ZSE, accounting for 46,5 percent of monthly traded value. Econet came second with 25,16 percent.
Volumes however moved in the opposite direction as exchange-wide volumes rose 25,30 percent to 120,52 million shares. TN CyberTech dominated in that category as 43,09 million shares in that counter traded hands during October as speculative and momentum trading activity increased around that paper.
Commenting on the equities performance, IH Securities said that while the ZSE was still holding on to gains, money supply conditions remained the core driver of valuations in the domestic market.
“In our view, performance of the ZSE still depends heavily on money supply dynamics,” the research firm said. “Given the delicate monetary space with the likelihood of policy shifts, we are in favour of agile companies that can navigate the current environment and, in the absence of capital gains, those that are consistent dividend payers,” the firm noted.
Meanwhile, the Victoria Falls Stock Exchange (VFEX) also closed October firmer. The foreign currency denominated platform saw its market capitalisation rising 5,71 percent to US$1,91 billion.
The VFEX All-Share Index climbed 7,42 percent to 159,91 points. The market was broadly positive although Seed Co International and Innscor were softer in the month, shedding 9 percent and 3 percent respectively.
Kavango led the major gainers list, rising 31 percent, Caledonia followed with 30 percent while Nedbank climbed 27 percent in the period.
Activity however eased off marginally.Total value traded on the VFEX fell 6,97 percent to US$7,87 million with Innscor contributing US$3,73 million of that.
Volumes also slowed 6,30 percent to 32,32 million shares, with Edgars leading the volume table, with 11,03 million shares changing hands.
IH Securities also noted renewed interest in the VFEX counters, saying the recovery in prices may be signalling a re-rating.
“Most counters are now trading above year-to-date averages,” the research firm said. “As a result, caution would have to be practised due to potentially limited upside.”However, IH expects activity to pick up this month.
“For November, we are anticipating a slight uptick in activity on share buy-backs as quite a handful of companies come out of a closed period. We also anticipate some reinvestments from dividends received from the June period,” the firm said.
