Delta, Econet dominate ZSE
....as market falters under tight liquidity

STAFF WRITER
Delta Corporation and Econet Wireless Zimbabwe remained central to activity on the Zimbabwe Stock Exchange (ZSE), collectively accounting for the majority of the months’ turnover.
Despite their prominence, the ZSE suffered a sharp 32% decline in total market capitalization in November, highlighting deep-seated market challenges.
The All-Share Index dropped 8.31% during the month, with Delta and Econet stocks reflecting broader market pressures, exacerbated by undervaluation and sluggish price adjustments.
Monthly turnover fell to ZWG287m, a significant reduction from October’s ZWG503m, with Delta and Econet leading trading activity.
Market analysts attributed the slump to undervalued stocks failing to adjust to their intrinsic values, coupled with tightened liquidity conditions.
Fincent Securities noted:”Delta and Econet remain critical to the ZSE, driving liquidity and turnover. However, constrained liquidity and macroeconomic instability are delaying price corrections for significant counters.”
The Top 10 and Top 15 indices led the downturn, driving the All-Share Index lower.
The Medium Cap Index edged up by 2.26%, while the Small Cap Index was flat at 100.11.
Among individual stocks, CFI Holdings stood out with a 48.65% gain, albeit on minimal volumes of ZWG21,386. Meanwhile, heavyweights like CBZ (-31.84%), OK Zimbabwe, Meikles, and Nampak recorded steep losses.
The Victoria Falls Stock Exchange (VFEX) was not immune to the downturn, with market capitalization slipping 0.32% and turnover declining 6.7% to US$3.5 million.
Key drivers behind the market slide
Liquidity Tightening
The Reserve Bank of Zimbabwe raised the local benchmark rate from 20% to 35% and increased reserve requirements, reducing both ZiG and USD liquidity.
Policy and fiscal pressures
The Finance Ministry introduced higher taxes on discretionary spending while cutting government expenditure, constraining investor liquidity.
Economic Uncertainty
Exchange rate volatility (US$1: ZWG25.45 at the end of November 29, 2024) has eroded confidence, with investors hesitant to commit capital under unstable conditions.
Stagnant pricing
Despite their importance, stocks like Delta and Econet remain undervalued, with prices failing to reflect their true fundamental worth.
Outlook for Delta, Econet, and the market
Delta and Econet are poised to remain at the forefront of the ZSE’s recovery as market fundamentals stabilize. Improved dividend payouts, driven by economic activity, could boost investor confidence and liquidity on both the ZSE and VFEX.
For the broader market, analysts anticipate sporadic liquidity spurts tied to Treasury disbursements. However, sustained growth will require deeper structural reforms and investor-friendly policies.
Delta and Econet remain crucial pillars of the ZSE, anchoring market activity even amid significant challenges. Their resilience and performance will likely shape the trajectory of the local bourse in the months ahead.