eBusiness Weekly
BH24 Reporter
HARARE – Retail stocks are current best defensive stocks at the moment in view of the prevailing economic climate, Analysts at IH Securities has said.
With Zimbabwe currently in an inflationary economic phase, observers see retailers – who focus on basic commodities – as firms that will be able to hedge against the normal loss of value.
“Even as the economy continues to tighten, food retail will remain defensive and will to a large extent be able to pass on the inflation induced price hikes to the consumer for most of the staple products which are highly inelastic,” said the analysts in a recent note.
“Retailers, such as Simbisa, with regional operations will be able to generate foreign currency earnings, which will put the company in good stead. However, we anticipate that volumes for discretionary products will come under pressure.”
Meanwhile, the usual suspects, Delta, Econet and Old Mutual have remained the most liquid equities on the Zimbabwe Stock Exchange within the difficult operating environment.
According to data provided by IH Securities for the third quarter of this year, Delta Corporation tops the most liquid stocks on the ZSE.
The beverages producer continues to stake the biggest share of the ZSE market cap. Delta’s market capitalization as at the close of the third quarter amounted to $1,36 billion, up 2016 percent from a prior comparable period market capitalization of US$446,93 million (albeit the exchange rate gains).
Telecoms giant Econet comes second with a Q3 market cap of $1,211 billion, although this was just an 18 percent rise from the prior comparable period market cap of US$1,02 billion.
Old Mutual had a market cap of $925 million for the quarter just ended, up 62 percent from US$572 million in the third quarter of 2018.
