Stocks grew 667 pc in the past 6 months
The value of all stocks listed on the Zimbabwe Stock Exchange grew by 667 percent for the first six months of the year to June 26, 2020. By close of trading during the six months under review total market capitalisation had reached $228,6 billion up from $29,7 billion at the end of December 2019.
In real terms, using official rates, the ZSE’s total value closed at US$3,9 billion up from US$1,77 billion at the beginning of the year.
Using alternative market rates, the value of the ZSE is upwards of US$2,5 billion up from around $1,2 billion prior year.
The month of June ended prematurely for the ZSE after trading was suspended by Government on suspicion that there are some illegal activities taking place on the bourse.
Market analysts say the stock market gained favour from investors looking at hedging against currency depreciation and hyperinflation.
The Zimbabwe dollar to the US dollar exchange rate depreciated from 22 in January to approximately 100 in June on the widely used parallel market. Officially it depreciated from 16,8 at the beginning of the year to the current 63,74.
Year-on-year inflation on the other hand raced to 786 percent at the last count in May 2020.
Although authorities have blamed manipulation, speculation and other non-monetary factors, independent market watchers have blamed the high levels of inflation and currency depreciation on high levels of money supply. At the last count in April 2020, broad money supply in the economy had grown 360 percent to $52 billion.
The increased money supply, depreciating exchange rate and high inflation coincided with the ZSE recording the highest turnover in a very long time.
Not less than $3,826 billion found its way to the stock exchange by the end of the period under review, surpassing not only the comparative prior year at $1 billion but the whole of last year at $2 billion.
In June alone, the market recorded turnover of $1,9 billion. CBZ Holdings was the market’s best performer having gained 4 198 percent to $29,96 per share. It was followed by Cafca, Bindura, FBC Holdings, Dairibord Zimbabwe Limited and Rainbow Tourism Group.