THE rise in Pretoria Portland Cement Company (PPC)’s share price to over $10 million last week reflects the linking of the company’s share pri
ce to parallel market exchange rate for the South Africa rand against the Zimbabwe dollar, analysts said this week.
They said that although the cement company’s share price may have been responding to the group’s interim financial results for the six-month period ending March 31, the surging price also mirrored the local currency’s parallel market rate with the rand.
“PPC’s price is a competent gauge of parallel market rates for the South African rand,” a market analyst said.
PPC closed at $10 900 000 on the local bourse and traded at R395 on the JSE Securities Exchange (JSE) in Johannesburg.
This gives an effective rand exchange rate of $27 594, slightly off the parallel exchange rate.
The analyst said this meant that the PPC share price still had room for an upward swing.
PPC last week said its Zimbabwean operation remained under sustained pressure from an unstable economic environment, warranting the non-consolidation of its results in the group’s financial statement.
“The company’s financial results are reported in rands, if that is converted into local currency the company outperforms other counters in terms of revenue,” a stockbroker said.