ZSE sets new record highs

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The Zimbabwe Stock Exchange gained 15.12 percent in the week to Thursday spurred on by fears over the erosion of value of bank balances amid the worsening cash crisis. In just a week, the stock market has added $1 billion on its market capitalisation to close at new highs of $7,64 billion. 

A lot of investors are buying blindly on very thin volumes, a situation which is technically not sustainable amid concern that the market has now overheated. At the close of the week, a mere $9.875 million of trades drove the $1 billion gain in market capitalisation.

The Industrials Index at 270.56 closed yesterday’s trades with a year to date gain of 87,20 percent.  Of the 58 active counters on the ZSE, 32 shares recorded a gain, 23 were unchanged, while there were three fallers. Volumes were heaviest in ZPI, which accounted for 45 percent of the shares traded 82.84 million shares traded.

Econet was the highest traded stock by value in the week at $3,5 million with the counter being one of the few that are still attracting foreign buyers. The telecoms operator is now trading on a 52-week high price of 60,61c and a year to date gain of 102 percent.

In Thursday’s trading, Delta surpassed its previous $1,57 record high achieved on August 1, 2013, rising 2.43 percent in the session to take its weekly gains to 18.95 percent. The beverages group came within a whisker of becoming Zimbabwe’s first $2 billion company, with $615,448 worth of trades in the week adding another $245 million to its market capitalisation.

Delta accounts for more than one quarter (26.6 percent) of the overall index. Old Mutual rose 15.8 percent over the week to close at $4,76.25. This puts the Old Mutual Implied Rate used during the hyperinflation period at $1, 82 – that is to say that if the local currency was to be delinked from the US dollar, the value of the local unit should be in the order of $1,82 to US$1.

If people thought that Padenga could not rise much further, it stacked on 58.8 percent during the week to close at 71.26c, putting it on a PE ratio of 43.2. OK also added an impressive 42.3 percent to 20c on $5,384 of trades.

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