ZSE breaches $1 billion mark

THE Zimbabwe Stock Exchange (ZSE)’s turnover reached $1 billion in June, surpassing the previous annual turnover record of $926 million, which was set last year.
This comes as the demand for stocks has spiked lately as investors seek refuge from rising inflation.
The southern African country’s official inflation was reported for May this year at 97,85 percent after gaining 95 percent points since May last year.

“We believe that activity on the ZSE has been spurred by two things,” said Fungai Nyaungwa, a senior associate at Akribos Research Services.
“Firstly, the need by foreigners to sell out of their positions and exit through dual listed counters, as well as local institutional fund managers moving a large chunk of their portfolio from monetary assets – which are currently yielding negative real returns – on to the stock market in search for value preserving assets.
“In addition, given that turnover is also a function of the price, the period under review saw some record high prices for some of the companies on the ZSE,” she said.
The local bourse’s turnover during the six-month period was boosted by Econet Zimbabwe Wireless (Econet) and Cassava Smartech’s (Cassava) $222,26 million trades in February, which were described by entrepreneur Strive Masiyiwa as housekeeping.
Still, this leaves the market’s organic turnover by June this year at around $800 million, which is still way ahead of last’ year’s turnover during the same period of only $312,1 million.
The market’s momentum has, however, been arrested by the reintroduction of the Zimbabwe dollar and the scrapping of the multi-currency regime, which took effect on June 24.
After a strong rally stretching over 12 weeks, the stock market has succumbed to a string of losses.
This also comes as measures put in place by the central bank to support the currency changes, seem to have pacified market activity in the economy in general.
As part of the measures, the central bank placed a three-month vesting period on dually-listed counters.
Fungible stocks can be bought or sold on one market or exchange, and then sold or bought on another market or exchange. According to the Zimbabwe Stock Exchange, shares of firms affected by this move include those for Old Mutual, PPC, Seedco International, ART Corporation, Cafca, Meikles and NMBZ Holdings.
Analysts say this promises to reduce “speculative trading of fungible stocks”, which is said to have been one of the major driving forces behind the unprecedented activity on the local bourse