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 Business Editor
The stock market closed Friday’s trades just 0,42 percent shy of reversing year to date losses from the January 1 level of 202,12 buoyed largely by firm trades in telecoms stock Econet Wireless and Seed Co. The Zimbabwe Stock Exchange traded past the 200-level last Thursday, the first time the Industrials Index has traded above that mark since January 21 at 200,85.

On Friday, the index was up 0,52 percent to 201,28.

Analysts say the strong run on the market is due to the lack of scrip at current levels, bearing in mind that the market picked at these levels around September 2013 and for almost a year the market has traded flat.

There is no incentive for current holders to offload stock except for a very few redemptions.

The ZSE has since April been recording monthly gains on the main index, this has largely been a recovery from the slump experienced earlier in the year that saw the Industrials touch a low of 163,85 on April 22.

The current mini-rally is being driven by Econet and Seed co.

Econet, which is due to report its interim results for the August period, is now trading on a 52-week high of 84,01c. It has so far gained 40 percent since the beginning of the year.

Invictus Securities stockbroker Edmond Mupfupairi said investors particularly foreign cannot choose to ignore as it is one of the cheapest telecoms company in Africa.

“Given increased flows into frontier markets from mostly American investors and for Africa Funds looking for exposure to Zim, Econet cannot be ignored. This is for the simple reason that the group has done well in the area of corporate governance, disclosures, and paid out a dividend.

On top of that the market is beginning to understand the Ecocash/Banking model and the likely returns.”

Econet says that growth in its business will come from overlay services going forward after the group made massive investment in data and Steward Bank helping in the growth of smart phone penetration.

On a price earnings (PE) basis Econet is cheap at 10,47x when other telecoms like Sonatel are at 14,14x, Vodacom at 15x.

Last month, Econet was the third most traded stock bringing in turnover of $4,87 million. Seed Co turnover for August was at $2,13 million.

The seed producer closed Friday with a 2c gain to 97c. “If you believe the whole story of Africa as having the fast growing population and the need for food security then Seed Co is what you need to look at.

“A look at the population n size of the new markets — East Africa (Kenya and Tanzania) and West Africa — Nigeria can give you the potential that Seedco has in Africa,” Mr Mupfapairi.

Previously ignored by many fund managers because of perceived country risk, the group has managed to change its mix as only 30 percent of Seed Co business is Zimbabwe driven.  Through its technical partnership with Limagrain, Seed Co has unveiled new seed varieties such as the 719 for West Africa.