MARKET capitalisation on the Zimbabwe Stock Exchange (ZSE) reached $2,7 trillion as of Thursday last week, before the Easter break, gaining significantly since the beginning of the year, according to official data. Weekly turnover was $578,7 million.
Foreign buys were at $113,7 million where as foreign sales were pegged at $119 million.
The All-Share closed the week on stronger note adding 1,071.26 points (5,08%) to close at 22,149.04 points.
Top gainers for the week were African Distillers, Delta Beverages, CBZ Holdings, Innscor and Axia. Trading in the negative were Unifreight, Masimba, Zimpapers, Dairibord and Hippo Valley Estates.
Market watchers, Morgan&Co see the ZSE rally indicating value preservation due to exchange rate volatilities dogging the market.
“We believe that the stock market will still serve as an avenue to preserve value in 2022. This is because the stock market has been able to effectively track exchange rate movements,”
Morgan&Co said in their market intelligence report yesterday.
Such concerns gained traction in the past few weeks, after Morgan&Co, predicted a bloodbath on the currency this year, with the Zimbabwe dollar projected to depreciate to US$1:$500 soon.
Already the Zimbabwe dollar is currently trading at US$1:360 on the parallel market.
Firms have been facing challenges securing cheaper foreign currency from the Reserve Bank of Zimbabwe (RBZ)’s forex auction due to delays in the allotments of winning bids. The Zimbabwe dollar is trading at US$1:$150 officially.
RBZ allotments can take anywhere from a few weeks to two months, although the central bank says it is actively working on addressing the backlog.
As a result of the lag, a lot of listed firms are finding themselves with excess local currency, but are unable to liquidate that money as suppliers mostly charge in foreign currency.