The ZSE recorded its highest January trading value, reaching $110 million, up from $93 million in December 2018 and 218% higher than the January 2018 turnover. Also notably, the foreign sold turnover at $42 million outpaced the foreign bought turnover at $41 million for the first time since October 2018. The dual listed Old Mutual share attracted the majority of the value traded.
The share has been highly valued on the ZSE for its fungibility in light of monetary policy uncertainty and the resultant value risk of single listed domestic equities.
Recent developments have added further uncertainty around the prospects of monetary policy reform and longterm political stability.
The week-long shutdown saw temporary business closures and social unrest that drew staunch criticism from the international community.
Rising speculation growing of the imminent introduction of a new domestic currency added further uncertainty as the issue has frequently entered public discourse in recent weeks.
The situation is being compounded further by the growing backlog Foreign Direct Investment remittances to foreign based investors.
Analysis suggests foreign investors are responding to the conditions by selling off traditionally safe local blue chip stocks in favor of the fungible and more liquid Old Mutual Shares.
While domestic investors buying up the local blue chips in a bid to protect the value of cash holdings.
The ZSE statistics show foreign sold turnover exceeded foreign bought, supporting the perception of foreign investors pulling out of the capital markets in response to the prevailing conditions.
The short term outlook for the markets hinges strongly on addressing the uncertainty being fueled by the monetary policy situation. T
he expectation would be for the trend to continue, as the investors anxiously await the forthcoming Monetary Policy Statement from the Governor of the Reserve Bank. The All Share Index rose by 7.96% to reach 157.54 at the end of January, despite the disruptions experienced during the month.
The performance translated to a $1.46 billion rise in total market capitalization, to close the month at $20.888 billion. Similarly, the ZSE Top 10 and Industrial indices rose by 9.14% and 7.94% respectively to close at 158.28 and 525.90, as market conditions favored blue chip counters.
The performance of mining equities was less positive, as the ZSE Minings Index fell by 6.4% to close at 213.13.