Enacy Mapakame Business Reporter
THE Zimbabwe Stock Exchange continued to rally unabated with total market capitalisation reaching fresh highs of $8 billion last Friday.
The mainstream Industrials Index recorded the year’s biggest one-day gain after it jumped 5,94 percent to 286, 63 taking its year-to-date gain closer to 100 percent. By the close, the main Industrials Index had put on 98,32 percent, the highest in the world.
Funds invested also improved significantly to $2 million up 54 percent from $1,307 million that was invested on Thursday. Local investors have been buying into the equities market as a hedge against currency uncertainties and shortages.
Most cash-rich Zimbabwean companies and individuals have been failing to access their cash locked in banks due to foreign currency shortages. Businesses, especially manufacturers and mines, have also been struggling to make foreign payments since the foreign currency shortages intensified at the beginning of 2016.
This is the cash that is now being deployed into the stock market, considered a safe haven by many. Notable riser for the day included the country’s biggest retail group, OK and financial services group – Barclays headlined the risers after each traded 20 percent higher to 24 cents and 6 cents respectively.
Banking firm NMB and TSL added 18,81 percent to 6,51 cents and 18,58 percent to 30 cents respectively. Hospitality group Meikles rose 16,55 percent to 29,01 cents.
The market’s heavyweights Simbisa, Delta and Econet were the main volume and value drivers for the day. Simbisa had 2,6 million of its shares changing hand to reach an all-time high price of 64,84 cents. The quick restaurant service provider accounted for 42, 18 percent of the volume aggregate and 71,05 percent on the value outturn.
Econet rose by 8,89 percent to 66 cents while Delta was 8,69 percent firmer to $1,73. Insurance giant – Old Mutual rose by 3,04 percent to $4,90. The Mining Index was unchanged at 82,2 after all the four mining stocks, Bindura, Falgold, Hwange and Riozim recorded no activity to close trade at previous levels of 3,2 cents, 2 cents, 2,6 cents and 67,89 cents respectively.
There were 16 counters that traded in the positive trades while there were no fallers for the day. Analysts said investors have been piling into the equities market in the absence of viable options in the country’s capital markets. “Current returns on the money market at between 1 percent and 5 percent per annum are not that attractive, considering the risk with near cash investments at the moment.”
Getting money out of Zimbabwean banks has been a mission impossible of late, with companies and individuals queuing for months to have their payments to foreign suppliers approved. Cash withdrawal limits are as little as $50 a week at some banks. “I would rather invest my money in stocks than have it stark in the bank,” said Mr Walter Mandeya from Harare.
Mr Mandeya added that popular sentiment is that the value of US dollar balances stark in banks is not at par with the actual value of the real dollar.
“Investors are thus looking at hedging against this loss of value by buying into stocks,” he added.