ZSE Q3 trades hit $231m

THE value of shares traded on the Zimbabwe Stock Exchange (ZSE) hit $231,3 million in the third quarter (Q3) of 2018 — a 27,6 percent rise from $181,2 million recorded in prior period.
In a report for the period, Old Mutual Securities (OMSEC) said foreign investors were marginal net buyers of $6,8 million worth of equities on the bourse — 29,9 percent of all trades.
“In Q3 2017, foreign investors accounted for 26,3 percent of all trades and were net sellers of $24,8 million worth of shares. Foreign investors were, however, net sellers of $5,4 million worth of ZSE listed shares during the last two months of Q3 2018,” the advisory firm said.
The market’s main industrial index added 12,9 percent during the period under review, following a 17,8 percent positive return in the second quarter of 2018.
OMSEC said the positive trend was accentuated by continued improved performance from most listed companies, as most trading updates and financial performance indicated improved profitability.
It, however, said “there were undesirable bottlenecks for some companies notably in the manufacturing and consumer sectors where the limited access to foreign currency restricted the otherwise potentially better growth in profitability”.
The mining index registered a notably lower return than the industrial index as it went up 1,54 percent during the quarter.
Prices for mining stocks were relatively sticky as financial performance by Bindura Nickel Corporation, although positive, was constrained by debt repayments and the international nickel price.
“Rio-Zim’s performance was severely curtailed by escalating local costs despite their revenue growth improving. Hwange Colliery Company Limited and Falgold’s performance were sub-optimal due to unsettled management issues and pending mine restructuring issues, respectively,” said OMSEC.
Some of the significant corporate events that happened during the period under review was the renewal of Delta’s cautionary in which the beverage company is still in negotiations over the potential cancellation of the bottler agreement between themselves and The Coca Cola Company.
Econet also notified shareholders of its intention to demerge and list its financial technology business, including Eco-cash, on the ZSE.
Meanwhile, OMSEC said property prices will remain high and the sector largely subdued till year end due to high financing costs, Old Mutual Securities has projected.
It said the property sector is facing low demand in the housing market and property-related fixed assets due to high rentals and building costs.
OMSEC said the property market is receiving support from risk-hedging investors, as they seek options against erratic currency travails especially the past two months.
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