eBusiness Weekly
Kudzanai Sharara
ZSE stocks rallied between Wednesday last week, to Wednesday this week with all indices recording solid gains.
This comes as cash rich individuals and companies continue to hedge against currency weaknesses that have bedevilled the economy since mid-2016.
The appointment of new Finance and Economic Development Minister Mthuli Ncube, seen as positive, has not changed the direction the market was taking prior to his appointment.
Debate currently in the market is whether the continued upward trend is a sign of confidence in him or not.
Some argue that stocks are rallying as investors are trying to lock value in stocks against currency reforms whose outcome is not known with certainty.
The path that Minister Ncube will take on bank deposits of above $9 billion will determine whether there will be loss of value or not. For those forecasting a loss of value, crystallising current bank balances in stocks could be a good option.
The upward trend can also be viewed as a sign of confidence in the new administration and the minister and investors might be taking position in undervalued stocks.
Both the main Industrials Index and the All Share Index recorded a 1,46 percent gain each while the Mining Index and the Top Ten Index added 0,77 percent and 1,04 percent respectively. The market capitalisation was also up 1,31 percent to $12,5 million.
Turnover for the period under review, jumped 77,25 percent to $24,5 million with foreign investors buying stocks worth $10,5 million while selling shares worth $7,3 million.
The number of shares that traded also increased by 71,58 percent after 88,3 million shares changed hands in 644 trades, up from 406 trades for the comparable period.
There were strong gains in mid and small cap stocks with Turnall leading the risers with a 43,66 percent gain to 2,04 cents. The company which has roof materials as its main products, reported its results for the six months to June 30, 2018 showing a return to profitability.
The company has been going through a bad patch in the last couple of years resulting in huge losses as fraud and mismanagement took its toll.
But a change in management, which coincided with the current boom in residential property development saw the company report a 77 percent growth in revenue on the back of a 63 percent growth in sales volumes. Revenue for the six months increased to $13,5 million from $7,6 million on the back of a 63 percent growth in sales volumes to 25,432 tonnes.
Dawn Properties was also among the top five risers up 20 percent to 2,4 cents. The company which owns properties in the hospitality sector, reported a plausible set of results for the half year to June 30, 2018.
The property concern, posted a profit after tax of $942 177, about 9 percent up from $90 442 recorded in the same period last year.
Construction company Masimba Holdings also recorded strong gains up 17,9 percent to 7,31 cents ahead of its interim results which came out significantly higher than prior year. Revenue for the period under review grew 55 percent to $17,9 million while EBITDA jumped 88 percent to $1,3 million driven by operating efficiencies and growth in the topline.
The market was, however, not short of fallers with Star Africa dropping off 10 percent to 0,9 cents. Barclays, BAT, Padenga and Seed Co were also among the fallers.
