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Enacy Mapakame Business Reporter
THE equities markets yesterday posted its 13th successive rise driven by gains in Delta although analysts predict a bearish market for July. The mainstream industrial index rose a marginal 0,85 percent to 102 points on thin trading in only three counters.

The biggest stock by market capitalisation, Delta rose 2,74 percent to 70 cents while cement maker traded on the downside shedding 0,31 percent to 65 cents.

Turnover for the day was low averaging $168 616. The resources index remained steady at 24,7 points.

Foreign buys totalled $160 638 against sells of $155 570.

Meanwhile, equities analysts have warned businesses to brace for a challenging July as the economic conditions experienced in June persist.

This is despite a 23 percent upsurge in turnover to $18 million recorded in June with average daily trades reaching $821 million.

Total volume traded rose 10,81 percent to 88,53 million shares with significant contributions coming from heavyweights Delta, Econet and Seed Co at 50 percent, 17 percent and 7 percent respectively.

In June, Government introduced measures to contain cash shortages such as the reduction in electronic transaction charges to promote the usage of plastic money.

Government also introduced controls over the importation of certain goods under Statutory Instrument 64 to promote local industry while deflationary pressures persisted.

Latest figures show year-on-year inflation at -1,69 percent while month-on-month inflation fell 0,02 percent to -0,24 percent.

“We expect the prevailing economic conditions to persist in July, hence a challenging time ahead for businesses,” said IH Securities.

Despite the economic challenges, the stockbrokers tip beverages maker, Delta, diversified conglomerate Innscor and its subsidiary Simbisa to weather the storm going forward on their strong business models.

Delta’s sorghum segment is expected to push earnings as the beverages giant is expected to commission two new Chibuku Super plants in financial year 2017 which will increase capacity in this line by 30 percent.

“We are optimistic of sustained growth particularly in the sorghum segment. Despite pressure on volumes, Delta continues to churn significant levels of net cash against a lower capex burden, which we believe will sustain the company’s dividend policy,” said IH Securities placing a buy rating for the stock and a target price of $1,17.

The stock is currently trading at 68,13 cents.

FMCG focused group Innscor’s reconfiguration and vertical integration is expected to drive efficiencies at the diversified group which seeks to increase its shareholding in Profeeds.

Innscor’s share price is expected to jump 105 percent to 35 cents while Simbisa is guided to reach 25 cents, an upsurge of 92 percent in FY17.

“We believe Simbisa is in a better position to have a clear operational focus and enhance efficiencies, in a manner that will improve performance and ultimately shareholder value.

“We expect an improvement in the EBITDA margin from the recent cost rationalisation exercise and expect operating cash flows will remain strong.”