ZSE market capitalisation slumps 7%

The Zimbabwe Stock Exchange (ZSE) value plunged 7,19% in August for the sixth month in a row to close at US$3,74 billion.

Fidelity Mhlanga

According to the Inter Horizon Securities (IH)’s monthly snapshot, the industrial index dropped 6,82% to 135,43 points on the back of losses in all heavyweights.

Bourse titans, Delta Beverages was down 14,58%, Econet Wireless and Innscor Africa tumbled by 12,53% and 5,53% respectively.

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Hospitality group Meikles gained 49,63% during the month while newly listed Proplastics also went up 30%. CFI Holdings grew by 28,21% with Rainbow Tourism Group and Masimba Holdings firming by 25% and 23,75% respectively.

The Mining Index lost a further 10,21% as all counters recorded losses with Bindura falling 6,67%, Falgold losing 33,33%, Hwange Colliery shedding 17,07% and RioZim going down by 14,29% in the period under review.
Other significant losses were seen in Ariston, Turnall, and OK Zimbabwe which tumbled by 60%, 16,67% and 14,63% respectively.

On monthly flows, activity declined in August with turnover dropping 24,22% to US$15,4 million. Average daily trades in August stood at US$0,81 million.

Heavyweights made the biggest contribution to total value traded, with Econet Wireless, Delta Beverages and Innscor Africa contributing 36%, 31% and 10% respectively.

Total volumes traded fell 35,17% to 76,26 million shares.

“Financials released during the month showed a slight improvement in top line performance, with an average growth of 9,4% in total income. A lot of focus was put in in the financial sector as the Reserve Bank of Zimbabwe put in place interest rate guidelines according to various levels of credit risk in order to stimulate economic activity, in the monetary policy released early in the month,” says IH.

“Banks such as CBZ, NMB and Barclays recorded revenue growth as the diversification of income streams started bearing fruit, with these banks having adopted new models to service the informal sector. This has become the trend with most companies as it is estimated that about US$3,3 billion according to RBZ is circulating within the informal sector.”

The securities firm said despite continued stress on the business characterised by subdued consumer demand, Delta with a US$1,06 billion market cap maintains a strong product breadth which largely enables the business to capture the consumer at various pricing points.

Econet market cap is pegged at US$459,1 million. CBZ market cap was at US$61,9 million.

CBZ’s 2015 first quarter earnings performance exceeded expectations as the diversification of their income streams began bearing fruit.

“In terms of the market, we expect it to record modest gains in September as Delta and Econet have started to show some support after reaching their three-year and 30-month low respectively,” IH said.

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