PHILLIMON MHLANGA
The Zimbabwe Stock Exchange has recorded its highest turnover in a month since the beginning of de-dollarisation last year following
massive rallies in June 2020 which saw turnover breaching ZWL$1bn.
Turnover, which means the monetary value of all shares traded and a crucial indicator of the market, in the month of June so far amounted to ZWL$1.15bn with less than 10 days to close the month.
The June turnover takes the year to date turnover to ZWL$3.07bn, the highest since the country de-dollarised in June 2019.
Between June to December last year, monthly turnover averaged about ZWL$200m. In January this year, turnover stood at ZWL$305m, while February was ZWL$360m.
In March, turnover was ZWL$426m while April and May, turnover amounted to ZWL$259m and ZWL$568m respectively.
The market rally comes despite an economic turmoil created by
the deadly coronavirus and poor economic policies.
Zimbabwe’s annual inflation was 786% in May so investors could be looking to preserve value by buying stocks.
There is also a shortage of cash and runaway exchange rates, leaving
the ZSE as the only viable market for investors.
Analysts told Business Times that the current interest in stocks is driven by currency fears with investors looking to preserve value unlike in the past when investors were backing their decision on company fundamentals.
Others said the rise of the stock market and the amount of money being invested on the local bourse shows that investors have lost confidence in the banking sector and low money market returns, leaving the stock market
as the preferred destination for investment.
Justin Bgoni wrote on his Twitter handle: “(It’s) a record for a month post-dollarisation (with less than) 10 more days of trading to go.”
ZSE head of trading, Robert Mubaiwa told Business Times: “It’s attributed to flight to safety as investors try to preserve value as the local currency continues to depreciate.”
The market capitalisation recovered this week to hit ZWL$206.2bn yesterday. The market was bearish last week going down to ZWL$197.5bn from ZWL$206.4bn recorded on June 8, 2020.
But, the sentiment turned firmly bullish this week to hit ZWL$206.2bn. In January, market capitalisation was ZWL$30bn.
In real terms, however, the local stock exchange’s market capitalisation is valued at US$8bn using the interbank market exchange rate of ZWL$25: US$1 or US$2bn using the parallel market rate of ZWL$90:US$1from
US$1.17bn in January this year.
The lofty stock valuations saw All shares trading hitting 1591.81 points while penny stocks also known as small-cap indices performed well. At the end of trading yesterday, it stood at 4835.23 points. Medium caps also
climbed into the bull market and stood at 12588.66 points.
Rich pickings were also in the Top 10 counters or bluechip companies, which have the financial wherewithal to go round the current economic turbulence.
It stood at 1208.68 points.
Industrial and mining stood at 5272.37 and 2442.48 points yesterday.
