ZSE weekly review

Published: 08 April 2014

The industrial index recorded a marginal gain of 0.2% in the week under review to close at 176.36 points, driven by gains in ABC (+22.2%), OK Zimbabwe (+8.1%) and Afdis (+6.7%). Activity decelerated in the mining index, as evidenced by a 3.3% decline in the mining index to close the week at 28.53 points. The value of shares traded increased by 38.5% to $10.7m despite a decline in volumes traded. Foreign trade was largely compromised of sell deals, with the value of sells increasing by 48.5% to $4.4m. The market cap remained almost stagnant at $5.03bn.

Zim Stats released data on the nation's trade deficit figures, reflecting a 9.4% decline for the two months to February 2014 from $547m in 2013 to $495m in the current year. Export figures for January 2014 stood at $278m. Imports declined to $966m from $1.1bn representing a 12.6% decline attributed to closure of companies that import raw materials, liquidity challenges and weak aggregate demand for products.

Optimistic sentiments were experienced in the banking sector, after Atlas Mara Co-Nvest Limited agreed to purchase the majority shareholding stake in Banc ABC at an investment cost of $210m, the largest equity transaction since dollarization in February 2009. This transaction might inspire local companies to seek new sources of capital as a means to combat working capital constraints.

The current subdued activity on the local bourse provides an opportunity for investors to purchase blue chip stocks namely BAT, Delta, Econet, OK Zim and Padenga, at discounted prices compared to their fair values.
- Imara Zim Research

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