Zimbabwe Stock Exchange in marginal growth in April
The Zimbabwe Stock Exchange (ZSE) witnessed slight improvement in market cap as it grew 3,95 percent to $3,42 trillion in April compared to the $3,29 trillion registered in the month of March.
However, the local currency experienced headwinds depreciating 34 percent within the month under review and as a result, performance of the bourse in real terms was diluted to a growth of negative 30 percent.
During the month, average daily value traded inched up from an equivalent of US$0,48 million in March to US$0,53 million whilst total volumes reduced 21 percent to 76,54 million.
Experts in the equities market say the market is still undervalued, which has been cited as one of the reasons for the migrations from the bourse to the US dollar denominated bourse – Victoria Falls Stock Exchange, by counters. The exchange continues to benefit from the pipeline of new entrants the latest being African Sun having finalised its movement across from the ZSE on the 14th of April. At listing, this added US$127,69 million to market capitalisation signifying a growing bourse.
“At a current market cap of US$1,9 billion, the ZSE is still trading at a discount to the long-term average of US$4 billion. As such, the ZSE offers upside, trading at a deep discount to fair value despite fundamental growth in businesses over the past three years and themes of increasing corporate transactions.
“We are of the view we will continue to see strong correlation between money supply and ZSE stock market performance. The uncertainty around money supply developments in 2023 propels us to lean more towards defensive stocks that have strong dividend policies in case capital gains remain subdued,” said IH Securities.
Elsewhere on the VFEX, market cap within the month decreased an aggregate 2,44 percent to US$1 billion despite the addition of hospitality heavy weight African Sun with only 4 of the 10 listings having traded in the green within the month. Padenga was the top gainer in April, increasing 21 percent month on month followed by SeedCo International which gained 11 percent within the period. Overall performance was weighed down by heavy weight Innscor, which saw a 17 percent decline in the period whilst BNC was the worst performer losing 36 percent of value in April.
Average daily traded for the exchange in April registered at US$94,912 versus the US$35,673 recorded in March.
WestProp has already listed on the exchange while First Capital Bank is also expected to migrate thereby diversifying sectorial offering.-ebusinessweekly
