Losses in top-ranked stocks continued on the Zimbabwe Stock Exchange this month, as investors dump pricey counters amid a general correction in the market.
By Chris Muronzi
Stocks have been on a decline, weighed down by losses in big caps and mid-caps in January.
The share decline was largely seen coming after a bull run triggered by inflationary pressures. On a month-to-date basis, Axia, Delta, Innscor, CBZ and Nicoz were the biggest losers with losses of 45,5%, 41%, 44%, 39% and 45,3% in Q4 respectively.
Other top counters such as Old Mutual gave up as much as 39% in the same period as investors offloaded the counter amid fears the US$/bond note premium could disappear as forex supplies improve.
Other counters such as PPC have been attracting the investors’ notice, as they seek to remit foreign exchange to offshore destinations and buy into discounted valuations.
As at December 31, PPC was a ripe target for value investors given its valuation metrics.
Locally, the counter, which is also Johannesburg Stock Exchange-listed, has been a firm favourite for foreign investors given its fungibility and the acute shortage of forex in the market.
A number of foreign investors are yet to get both principal and capital gains to their respective countries, as Zimbabwe battles with forex shortages owing to depleted nostro balances.
As at December 31, PPC was trading at a discount to its book value of 83% and a price-to-earnings of 156. This could be the attraction for investors. The mainstream All Share Index was down 10% in January to close at 90,43 points.