eBusiness Weekly
Business Writer
The upward trend on the Zimbabwe Stock Exchange continued unabated for the week ending Wednesday November 14, 2018 largely driven by gains in big cap stocks — in particular Delta and Econet.
Ironically, the two stocks released their half-year earnings last week, which showed they had benefited from increased demand and a bit of panic buying experienced in the country for the six months to September 2018.
The gains also come at a time the country’s inflation for the month of October reached levels last seen before dollarisation.
According to ZimStats, the year-on-year inflation rate for the month of October 2018 stood at 20,85 percent, gaining 15,46 percentage points on the September 2018 rate of 5,39 percent.
Stock market investments are largely seen as a hedge against spiralling inflation. For Zimbabwe, high inflation rates have also coincided with currency uncertainties and value loss that has seen cash rich individuals and institutions looking for alternative investment vehicles away from bank holdings and money market investments.
The ZSE Top 10 Index, was the week’s biggest mover up 11,73 percent to 175,87. This shows investors were selective in what they buy.
Both Delta and Econet made it into the top five risers for the week with the telecoms giant adding 27,43 percent to close at 253,86 cents.
Investors seem to cheer the Group’s latest set of results which saw revenues jump 70 percent to $600 million for the half-year to 31 August 2018, up from $353 million in the same period last year.
Investors will also be looking at potential benefits from the Group’s unbundling plans which are expected to unlock shareholder value.
Delta put on 11,99 percent to 311,91 cents following the release of its half year results to September 2018. Total revenue increased by 37 percent to $341 million driven by growth in volumes particularly in lager beer.
Lager beer volumes out turn of 1,040 million litres was the highest since 2013 when volumes reached 1,027 million litres.
Fidelity Life, however, led the risers, up 47,14 percent to 10,3 cents. The Group recently said it is now firmly set on sustainable growth path. At least 16 counters recorded gains while 15 were in red.
First Capital Bank was the week’s biggest loser down 32 percent to 7 cents. In its last update to the market, Barclays had said it is set to spin off its non-core banking assets as part of its restructuring programme.
The banking group has a 50 percent shareholding in Makasa Sun, which will be later listed as a separate entity on the local bourse.
Dairy products producer Dairibord Zimbabwe Limited Holdings was the second biggest loser down 25 percent to 15 cents. The company is one of those that are going to be affected by the lifting of SI 122 (2018) allowing among other things, the importation of previously restricted dairy products.
The mining sector was the only index to fall shedding 4,16 percent to 208,81. This is in a week one of the listed miners, Hwange Colliery was suspended from trading on the Zimbabwe Stock Exchange after the troubled coal miner was placed under administration following a series of losses in addition to debts in excess of $150 million to Government.
Fellow miners, Bindura and RioZim however dragged the Mining index lower, dropping 12,19 percent and 0,79 percent respectively.
RioZim had problems of its own after it suspended production at three of its gold mines citing shortage of foreign currency needed to import critical consumables and spare parts. The company has since resumed operations after reaching terms with the Reserve Bank of Zimbabwe (RBZ) over foreign currency un(availability.)
