Rallying blue chips drive ZSE

PHILLIMON MHLANGA

Bellwether stocks staged a robust rally on the Zimbabwe Stock Exchange (ZSE) this week lifting market capitalisation to ZWL$1.967 trillion on Tuesday from  from ZWL$1.78 trillion reported last week.

The All Shares index rose by 2.51% or 397.57 points to close at 15 854.72 points while Top 10 counters gained 3.32% to close at 10 639. 14 points. Penny stocks gained 2.23% to close at 383 004.20 points.

This week’s rally benefited from major gains noted in blue chip counters which exerted their strength on the ZSE.

Investors enjoyed a broad-based rally led by National Foods Limited, which rallied ZWL$272.98 to close at ZWL$2 023 while cash-rich retail and manufacturing conglomerate Innscor Africa added ZWL$19.78 to close at ZWL$330.06.

The country’s biggest brewer, Delta Corporation, gained ZWL$5.40 to ZWL$248.86.

“This rally is a bull market of blue-chip counters which exerted their strength,” an investment manager, who preferred not to be named told Business Times yesterday.

However, African Distillers dropped ZWL$15.00 to ZWL$245.00 Lafarge Zimbabwe eased ZWL$2.78 to close at ZWL$125.00. Cigarette manufacturer BAT was a ZWL$1 down to close at ZWL$33 666.

The losses were, however, overshadowed by gains recorded this week.

Turnover was ZWL$808m from ZWL$240m reported last week, demonstrating a greater activity than in recent sessions.

Foreign sells stood at ZWL$43m. There were no foreign buys for the better part of last week.

Investment analysts told Business Times that the local stocks were the most overpriced thanks to uncertainty surrounding hyperinflation and runaway exchange rate and they believe stocks were selling at prices they wouldn’t sell if it was linked to world fundamentals.

This means the local stock market is largely underestimating how the economic crisis can prompt a permanent damage and change to both the economy and companies listed on the ZSE.

They said it was still a mystery why the crisis has not rocked the ZSE.