No end in sight for ZSE bull run


THE bull run on the Zimbabwe Stock Exchange (ZSE) continued yesterday, with market capitalisation surpassing $14 billion, as investors make use of real time gross settlement (RTGS) balances to invest, latest statistics from the bourse have shown.

On Wednesday, market capitalisation was $13,79 billion.

However, market research firms were pegging market capitalisation at close to $15 billion as of Wednesday, as these firms factor in Econet’s Class A shares, which are not tradable to its ordinary shares.

The industrial index was up 1,54% to close at 494,64, aided by gains in Barclays, FML, Nampak and PPC and Econet.

Barclays led the gains yesterday, firming by 17,14% to close at $0,082 after a negotiated deal in which 322 998 026 shares were snapped up at a value of $8,5 million.

Malawi’s First Merchant Bank is in to buy a controlling stake in Barclays Bank Zimbabwe, after its parent Barclays Plc said it wanted to divest from the Zimbabwean unit.

FML was up 16,74% to close at $0.1681. Nampak was up 11,46% to close at $0,14, PPC gained 8,75% to $3,0397. Econet was up 6,19% to $1,7108.

The mining index was 2,81% up to 141,39.

Stockbrokers’ Association of Zimbabwe vice-chairperson, Arnold Dhlamini said investors were finding it better to invest their RTGS balances in stocks rather than holding on to them, which was driving the market capitalisation growth.

“I think there is a lot of cash in the accounts and I think that it is the only avenue that accepts RTGS and guys are looking at it as an avenue to preserve value. I think it is a demand and supply issue. There is a lot of demand from the buyers because I think it is to do with availability of alternative assets, which are very few and the stock market seems to be the only sort of haven that people are very knowledgeable about,” he said.

Econet gains are on the back of the company raising $130 million to pay foreign obligations through a rights offer earlier this year, meaning the company now has less debt. Econet Global was the underwriter to the transaction.

The company says it wishes to invest in new innovation, which is giving investors’ confidence in the company.

IH Securities has projected the market to trade higher on sustained demand in the fungible counters in which shareholders can trade their shares across borders.

In Zimbabwe, only Old Mutual has fungible shares, as it is also listed on the London Stock Exchange and Johannesburg Stock Exchange.

The insurance giant adopted a strategy to inject more investment capital into equities, thus, increasing stock value, which was making them more profitable, as their half year profit after tax ending June was up 614%.

PPC is currently seeing higher demand, which is leading them to push out more volumes.


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