Regional equities: A cross-section

BY EBEN MABUNDA

THE Zimbabwe Stock Exchange (ZSE) opened this week in the red, extending prior session losses as demand weakens. The mainstream All Share Index (ASI) slumped by -0,57% to close at 6133,69 points, dragging down month-to-date performance to a loss of -0,9%. The Zimdollar liquidity pin-down by the Central Bank in a bid to curb inflation through reduced money supply, along with continued sell-offs, weighed on investor sentiment in early week trades.

The ZSE stretched gains into the final week of June, taking the streak to six consecutive weeks as hedge-seeking continues. Gains have mainly been skewed towards small caps, which have sustained the rising trajectory for 37 straight sessions while market heavies have been subject to profit-taking mixed with value chasing. The high risk of inflationary recurrence and risk aversion against a weakening local currency have therefore largely influenced the direction of stocks.

Despite marginalising momentum in terms of magnitude, the mainstream ASI firmed by a further 0.5% in the past week to close at 6169 points, scaling up year-to-date average return to 134%. The ZSE has a market cap of ZWL744.7 billion (US$2 billion).  For a fairer comparison of the regional stock markets, we will take a cross-section of the performance of regional equities over the past week.

The Lusaka Stock Exchange All Share Index pared 0,41  points to close at 4,611 in the previous week, representing a 1-week gain of 4,2% and an overall year-to-date gain of 17,9%. The weekly data shows a 28% decline in volume traded, 13% improvement in turnover, and 65% improvement in deals as compared to the previous week’s trade. The current market capitalisation of the LuSE is ZW$60,53 billion (US$2,7 billion). The LuSE sailed stable at 4611.38 on Monday.

Having scaled 0,03% on Monday to 6624,11 points in the week, the benchmark Botswana Stock Exchange Domestic Companies Index (BSE-DCI) plummeted 0,03% to close at 6622 points and an overall year-to-date loss of 3,7%.

The BSE has a US$3,2 billion market cap. A significant improvement in the second half of 2021 driven by government efforts to accelerate key economic reforms, following a boost through a US$250 million loan extended by the World Bank.

On Monday, the Johannesburg Stock Exchange slumped 0,24% to close at 6 6166,88 with a market cap of R16,39 trillion (US$1,14 trillion). The JSE closed slightly weaker (0,2%) in the previous week amid mixed global markets as the ongoing battle with the Delta strain of Covid-19 threatens economic recovery and weighs on sentiment.

Meanwhile, the JSE has approved the listing of six SA Taxi Holdings’ social bonds on the bourse’s sustainability segment. The six social bonds valued at a total of R900 million (US$63 million) will have a maturity of between one and 10 years.

Nairobi Stock Exchange All Share Index (NASI) plummeted 0,24% in the past week. A total of 17,761,200 shares corresponding to a market value of KES 629,575,066.00 (US5,8 million), were traded. However, the NSE primary index comprising of all stocks has posted the highest return at 15,4% through the first six months of the year.

Regionally, the improved performance places the NSE as the third best performing market. On Monday, the upward trend was sustained as the market inched 1,61% higher to close at 173,97 points and a market cap of KES 2,64Tr (US$24 billion).

The Nigerian stock market gained N290bn (US$705 million) at the end of trading last week as the All-Share Index of the Nigerian Exchange Limited rose by 1,5% to 38,212.01 basis points with the market capitalisation increasing to N19,92 trillion (US$48,4 billion) on Friday. The consumer goods lead sectoral gains, recorded a 5,1% increase.

It was followed by the industrial goods sector, which gained 2,1%, while the insurance and banking sectors rose by 2% and 1,3% respectively. On Monday, the market gained 0.02 maintaining its upward trend.

Mabunda is an analyst and TV anchor at Equity Axis, a leading financial research firm in Zimbabwe. — ebenm@equityaxis