ZSE back in the black

The Zimbabwe Stock Exchange registered growth in the month of April after more than a year in the red, with total market capitalisation closing 7,91% higher month-on-month at US$3,03 billion. This is the first time since February last year the market has risen.

Fidelity Mhlanga

According to Inter-Horizon Securities (IH)’s monthly snap shot, industrial index was up 8,38% to 105,79 points buoyed by gains in all heavyweights counters.

British America Tobacco was up 8,84%, Delta Beverages surged 24,44% and Econet Wireless gained 2,33%.

The mining index was up 3,23% on the back of gains in RioZim and Bindura of 5,77% and 2% respectively.

Other significant gains for the month were Proplastics, up 52,78%, OK Zimbabwe gained 4,11%, Innscor Africa surged 17,46% and Art Corporation grew 16,67%.

The month’s biggest losers were Radar Holdings, Hippo Valley Estates, Ariston, Seedco and Zimre Property Investments, which tumbled 35,08%, 18,52%, 13,46%, 12,50% and 8,42% respectively.

Monthly flows remained depressed as turnover dropped by 14,50% in April to US$14,05 million with average daily trades for the month coming in at US$702,290.

Delta Beverages, National Foods Limited and Econet Wireless made the biggest contribution to total value traded, contributing 38%, 10% and 7% respectively.

Total volume traded rose 93,06% to 188,43 million shares.

“Both Delta Beverages and Econet Wireless are due to announce their full year earnings soon; we anticipate the numbers to reflect the increasingly difficult operating environment in which both companies have had to navigate.

Following the 4Q16 trading update from Delta, where the company continued to leverage its product mix, we saw a decline in volumes across all beverages y/y, however, on a q/q basis, SBs, and sorghum volumes recorded a 6% and 15% increase respectively reflecting the beginnings of some recovery albeit off a low base,” IH said.

The brokerage firm sees Econet Wireless reporting lower revenues as voice remains affected by the shift to Voice Over Internet Protocol and the regulatory tariffs affected by government.

Delta beverages has a market cap of US$871,02 million. The company’s top-line remains under pressure, with some stability beginning to come through in select lines, although at a low base.

CBZ with a market cap of US$75,60 million, which places it at a discount to comparable companies, is seen continuing growing its income streams and the roll-out of new products will see earnings performance remaining high come year end.

On National Foods, IH says the maize division generally performs better in seasons where national agriculture output is low, therefore, continued growth is anticipated in FY16.

“Despite strained corporate earnings, the market has started registering notable gains and we expect the Industrial Index to remain in the positive as bids improve in counters such as Delta Beverages, BAT Zimbabwe and Innscor Africa where valuations have started to become attractive,” the brokerage firm said.