eBusiness Weekly
Kudzanai Sharara Taking Stock
The Zimbabwe Stock Exchange recorded one of its biggest monthly gains in April 2018, helped by a positive trading update from the market’s biggest listed entity by market capitalisation, Delta Corporation.
Delta’s trading update was the icing on the cake, in a market that had already been stabilised by the largely positive earnings recorded by most companies for the period ended December 2017.
In April, the ZSE’s Top 10 index, made up of top companies by market capitalisation, was the market’s biggest mover reversing first-quarter losses after closing the month positive with a 0,26 percent gain to take its year to date gain to 0,82 percent.
The positive trend was also recorded on the ZSE’s other indices with the main Industrials Index recording a strong 13,14 percent gain to reduce its year-to-date loss to just 0,71 percent.
Beverages giant Delta Corporation led the upward surge, gaining more than 27 percent to $2,02 in the month following an upbeat trading update that saw the company recording revenue growth for the first time in four years. Delta’s group revenue for the year to March 2018 was up 18 percent, on the back of a 27 percent growth in lager beer volume for the full year.
Econet was, however, the market’s biggest mover up 34,29 percent to 89,98 cents ahead of its finals for the year ended 28 February 2018.
The company is expected to report significant growth in earnings for FY2018 after paying off its $130 million debt and in the process freeing up funds to the bottom line.
In the first half of FY2018 profit after tax increased to $75,27 million compared with $27,38 million recorded in the prior period due to a decrease in net finance costs to $4,310 million from $14,71 million.
Analysts expect similar growth for the full year due to the reduction in finance costs as well as revenue growth in the overall telecommunications industry.
According to POTRAZ, total telecommunications revenue for the year 2017 increased by 11, 2 percent. The growth in sector revenue was attributed to the upsurge in the consumption of data and internet in the country, a trend that is expected to continue going forward.
Simbisa Brands, which is planning to have a secondary listing on the London Stock Exchange’s Alternative Investment Market (AIM), was the second top riser after adding 29,5 percent in April to 46 cents.
Simbisa is also in negotiations to acquire a complimentary business, FoodFund, which has a presence in Europe and the Middle East. The move, which is subject to regulatory approval will enable the company to raise additional funding for its expansion particularly in the region, something that is difficult to do on the Zimbabwe Stock Exchange.
Other notable risers include NMB, up 22,22 percent to 11 cents.
NMB recorded one of the most pleasing results for the year ended December 2018 after it recorded a 98 percent growth in total comprehensive income to $10 million from $5 million prior year comparative. Basic earnings per share were up 95 percent to US 2,58 cents from US 1,32 cents. A dividend of US0,36 cents was declared.
In total there were 25 counters that recorded gains with the list including Axia, PPC, Innscor, Zimplow, DZLH, Falgold and CBZ. Most of these counters reported improved results from prior year comparative.
The market was however not short of fallers with First Mutual Properties the market’s biggest loser down 12,65 percent to 4,35 cents. This comes after the property concern’s revenue for the year to December 2018 declined by 7,13 percent to $7,4 million compared to prior year’s $7,9 million on the back of declines in rental income as tenants negotiated for downward rent reviews as well as depressed demand.
Star Africa’s share price also came off heavily down 10,52 percent to 1,7 cents amid news that Zimbabwe Asset Management Company (ZAMCO) is set to take over a 58,54 percent equity in the sugar concern. Starafrica Corporation creditors acquired an 89 percent stake in the company after converting the sugar processing firm’s $46,8 million debt into equity.
Investor interest was also higher in the month after 206,3 million shares worth $47,97 million were bought up from 109 million shares worth $40,67 million that were bought in March.
Meanwhile, African markets’ performance was mixed in the month with Nigeria’s NGSE All Share Index shedding 0,48 percent during the month. Kenya’s Nairobi Stock Exchange dropped a 5,80 percent while the Botswana Stock Exchange came off by 1,12 percent.
Ghana’s GSE-Composite Index remained the one of the continent’s top performer adding 3,64 percent in the month to take its year to date gain to 35,26 percent.
