The Zimbabwe Stock Exchange (ZSE) reached an all-time market capitalisation high yesterday as the stock market remained the most rewarding and easy to access market for cash rich investors.
The ZSE has been bullish for most part of the year and yesterday reached a market capitalisation of $83,8 billion, an all-time high in local dollar terms.
In real terms, the equity market is now valued at US$3,35 billion using the pegged exchange rate of 25 and US$1,67 billion using a parallel market rate of 50.
The local currency has been on a downward path and is now worth only 2 percent of its value from a fixed rate of 1:1 before February 22, 2019.
Yesterday’s rally also left the ZSE All Share Index trading above the 600 level for the first time since the new indices were put in place by the ZSE.
Year-to-date, the All Share Index has gained 179,60 percent. Penny stocks have, however, performed much better with the Small Cap Index having gained 288,66 percent year to date.
The much loved ZSE Top 10 is up 168,41 percent since the beginning of the year but has no doubt received the bulk of the invested funds.
The ZSE Top 10 Index is made up of the ZSE’s top companies by market capitalisation and constitutes 71,34 percent of the overall ZSE market capitalisation.
Cassava Smartech, which includes mobile money provider EcoCash among its business units, is the biggest company by market capitalisation at $12,9 billion or 15,46 percent of the total market capitalisation, with former parent company Econet following at $12,1 billion market cap. Delta and OK Zimbabwe are third and fourth by value size.
The counter most favoured by investors in terms of price is cable manufacturer, Cafca, which has gained 1,023 percent to 2 000 cents.
Battery and tissue maker Art follows with a 935,2 percent gain to 134,58 cents.
First Mutual Properties, Medtech and OK Zimbabwe have also had a good run and completes the top five performers on the ZSE.
Market watchers say although the listed entities are struggling with falling volumes being recorded across the board, the ZSE has remained the most liquid and easy to access market for investors.
The last two years of price weaknesses on the bourse has also seen investors seeing some value in listed stock.
Hyperinflation, which reached 676 percent at the last count in March has also seen investors looking to preserve value by buying into stocks.
Shortage of cash and a runaway exchange rate is also another reason why the market has found legs to run on, observers say.
The property market, which should be an alternative investment for pension funds, insurance players and other investors has also been hit by inflation for viable construction while structures already in place are struggling with voids and rental arrears.
Government bonds and treasury bills, which because of their prescribed asset status should be finding favour with investors, are also drawing little attraction because of the negative returns they are offering.
Negative interest rates have also left the money market unviable leaving the stock market as the only viable legal market for investors.
The stocks market has since the beginning of the year helped investors return more than 30 percent in real terms.
At the end of 2019 the ZSE market capitalisation was valued at US$1,17 billion and at yesterday’s US$1,67 billion, investors have gained 42,7 percent.