Turnall: ZSE’s stand out stock

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PHILLIMON MHLANGA

Buildings materials producer, Turnall Holdings Limited’s stock became the local bourse’s overall best performing stock on the Zimbabwe Stock Exchange (ZSE) in terms of percentage performance during the year.

The stock rallied 428,42 percent in 12 months to December 2018 to $0,0502 from $0,0095 at the end of 2017.

But, several analysts who spoke to Business Times yesterday described the Turnall counter as a light or penny stock in terms of its return. They indicated, however, that investors can still ride to riches with the stock.

The stock needs to turn the current prices many times to get the same return of blue chip companies like Delta, Econet and Old Mutual, they said. The value of Turnall shares that exchanged hands stood at $539 171,73, at the end of December in 2018 when the value of counters such as Delta, Econet Wireless and Old Mutual stood at $159 134 197,52, $209 497 106,24 and $107 998 826,76 respectively.

“Yes, the stock (Turnall) movement was very significant in terms of percentages but we also need to look at its actual return,” Mutandani Makuyana, head of research at Invictus Securities Zimbabwe told Business Times yesterday.

“Lighter or penny stocks like Turnall are elastic stocks and they quickly respond to what’s happening in the market. But, in terms of return, the stock might need to turn maybe 300 times to make the same return of say Delta, Old Mutual or Econet. So, it’s important to also look at the actual return.”

Transport and logistics concern, Unifreight Africa Limited, was another top stock which saw its price surging 236,62 percent to $0,0478 from $0,0142 at the beginning of the year.

Other stocks that did well were financial services provider, NMB Holdings, which recorded 166 percent during the year, Zimplow (161,81 percent), Proplastics (156,58 percent), Edgars (153,73 percent and the country’s largest leisure group African Sun (108,33 percent).

Deposit taking microfinance institution Get  bucks, Powerspeed and PPC saw their stocks surging by 89,19 percent, 86,67 percent and 82,69 percent respectively. Delta, which this week increased prices of its products after government reversed its plan to sell its products in United States dollars to cushion the company from potential losses, experienced a 70,57 percent increase in its price to $2,7291 from $1,6 at the beginning of 2017 while Econet’s stock surged 54,89 percent to $1,43 at the end of December last year from $0,92 in January 2018.

Pharmaceuticals manufacturer, Medtech Holdings Limited, experienced losses during the year with its stock price going down 60 percent to $0,0002 recorded at the end of December from $0,0005 recorded at the beginning of January 2018. Other stocks that experienced multiple individual bear markets were starafricacorporation, Fidelity Life, Mashonaland Holdings, NicozDiamond and BAT which saw stock prices going down by 35 percent, 20,45 percent, 16,76 percent, 14,11 percent and 7,56 percent respectively.

ZB Financial Holdings, cement maker Lafarge and ZIMRE also experienced depression. Their stocks went down 2,78 percent, 3,6 percent and 1,16 percent respectively.

Throughout the year, there were block trades and increased individual trades, particularly in the month of October 2018 and this helped to drive the final turnover to the highest figure, post dollarisation, of $926,3 mln against $694,87 mln recorded in 2017, a 33% rise.

ZSE data for the year 2018 shows that October was the month with the highest recorded turnover, which peaked at $161,23 mln while December 2018 registered $92,94 mln, a 23% increase over the December 2017 figure of $75,35 mln.

On the stock market outlook, analysts said shares would continue to trade in negative territory due to the lack of stimulus for a move to the black while there is not enough attraction for an investment into shares. “It’s a little bit difficult for now because the market is subdued overall due to currency issues and inflation which remain in place,” Makuyana said.

He added: “But, it remains a safe haven for funds. Basically, one can’t keep your liquidity in real time gross settlement. This means, the ZSE remains the near feasible alternative, given that in this January, we are seeing a lot of sellers because of school fees. After this, we expect the market to be bullish again.”