Stock Market Weekly Review

06 Sep, 2019 - 00:09 0 Views

eBusiness Weekly

Enacy Mapakame
Bears continued to dominate the Zimbabwe Stock Exchange (ZSE) trades as all the benchmark indices closed the week in the negative on subdued demand.

In the week to Wednesday, the primary indicator, the ZSE All Share Index was 0,69 percent lower to close at 166,1 points.

The ZSE Top 10 Index eased a marginal 0,46 percent to 148,77 points as the market’s heavily capitalized stocks succumbed to sell offs.

At 552,43, the Industrials Index was 0,7 percent below prior week levels as losses were recorded across board.

The Mining Index of two active counters also closed in the negative after retreating 0,58 percent to 268 points.

Total market value eased a marginal 0,48 percent to $21,7 billion. Consumer stocks dominated the week’s top fallers with Powerspeed, OK Zimbabwe and Axia decreasing by 20 percent to 26 cents, 11 percent to 31,36 cents and 8 percent to 39,15 cents respectively.

Apart from erratic power supplies and foreign currency shortages, consumer oriented firms across the country are also suffering inflationary pressures as disposable incomes continue to weaken.

Also making it in the top five fallers were Turnall which fell 11 percent to 7,1 cents as well as FML that lost 17 percent of value to close pegged at 21 cents after reporting gross premium written rose 86 percent to $157 million during the half year to June 24, 2019. The insurance firm also attributed the strong growth to some organic growth and acquisition of new business both in USD and local currency.

Also on the downside, largest stock by market capitalisation Delta, lost 3 percent to $2,99 while Dairibord eased 6 percent to 29 cents.

Other losses were also recorded in National Foods, Padenga and PPC which fell 2,78 percent to $7, 2,88 percent $1,60 and 2,38 percent to $2,05 respectively.

Further losses were offset by gains in hospitality group, RTG which rose 14 percent to 8,6 cents. Banking group, NMB ticked 12 percent to 31,5 cents after reporting profit before tax for the half year to June jumped 533 percent to $74 million this gave rise to total comprehensive income of $61 million from $9 million.

Peers, FCB put on 6 percent to close at 7 cents while property firm, FMP advanced 5 percent to 6,48 cents.  FMP’s rental income for the half year to June grew by 69,9 percent to $6,7 million driven mainly rent reviews, improved occupancy levels, improved turnover rentals on retail space and exchange gains on foreign currency denominated business. Resultantly, net property income also improved 68 percent to $5,36 million.

At $1,27, second biggest counter by market capitalisation, Cassava, was 3 percent above prior week, wrapping up the week’s top five risers.

On the resources side, RioZim eased 0,9 percent to $2,20 while Bindura remained unchanged at 11,5 cents.

Also maintaining prior week levels were Zimpapers that closed at 8 cents; Truworths at 2,02 cents; willdale at 2,5 cents; Fidelity at 8,41 cents and General Beltings at 2,88 cents.

Proplastics also remained unchanged at 38 cents after reporting a 28 percent decline in production volumes in the six months to June 30, 2019. Despite the decline in volumes, cost of sales was contained to a 16 percent increase despite the inflationary pressures in acquiring raw materials. Profit for the period, however, jumped 346 percent to $5,4 million.

Several other companies released their earnings report for the half year to June that showed the operating environment was severely constrained on fundamental changes to the economy due to the recent fiscal and monetary changes effected during the six months to June.

Among the key reforms made were the floating of the exchange rate as well as introduction of local currency and the scrapping of the multi-currency system for local transactions.

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