IH Securities predicts a good second half for Zim Economy
The Zimbabwe economy will see a recovery of the economy beginning to emerge in the second quarter of 2021 as tobacco auction floors open and maize deliveries to GMB begin, stockbroking firm IH Securities has said.
Despite the effects of COVID-19 that saw the economy go under lockdown in the first two months of the year, IH Securities is of the opinion that the good agriculture season the country has had, will result in a marked improvement in bottom of the pyramid liquidity and some proliferation of the consumer demand seen in the fourth quarter of 2020 in hard currency.
In its latest research note themed “Riding The Wave” IH said the recovery will be in favour of consumer facing businesses that are listed on the Zimbabwe Stock Exchange.
“Reviewing latest trading updates and financials of consumer facing businesses like Delta, Innscor and Econet; we see a marked improvement in trading volumes for the half year ended December 2020 albeit off a low base but signalling that consumer spend may be more robust than expected as lockdown restrictions ease going into 2Q21.”
“We foresee a resilient earnings base in select consumer names which will now be increasing dollarized post SI 185 – we believe there is a prescient opportunity in under-valued equities,” the brokerage firm said.
It added that the present stability in the economy (fragile as it is) will necessitate a return to fundamental valuations as investors return to basics and interrogate opportunities.-ebusinessweek
