Black market rates retreat after policy change

Published: 26 June 2019
The Zimbabwe Stock Exchange shed 0.6% as big caps stalled under thin trading following yesterday’s significant monetary policy developments.
The imposition of the 90-day vesting period for dual listed share is expected to noticeably depress market activity, having seen rising trade in the Old Mutual share as foreign investors exited the market while speculators exploited exchange rate arbitrages. The interest rate hike to 50% per annum is also expected to dampen trading activity as the government looks to mop up excess liquidity.
Looking ahead, despite the new policies the market is expected to continue making gains with the real interest rates still negative. Expectations are for an increased emphasis on export linked stocks, in light of the newly legislated restriction on US dollar pricing. To that end, stocks such as Padenga and foreign currency earners like African Sun and Rainbow Tourism Group should be big draws.
The RBZ interbank mid-rate opened at 6.3107 while the parallel market rate was quoted between 10.5x-11.5x as most traders stayed away in fear of anticipated police raids.
At the close of trades, turnover was down from $35.3 million the last session to $4.3 million as 3.63 million shares were traded in 116 trades. The market cap dropped to $30.6 billion (US$4.85 billion). The Delta counter drew the highest trades at 24 with a value of $903k while Cassava drew the highest trade value at $1.2 million in 21 trades as it added 0.06% to close at $2.3464 (US$0.37) ahead of the release of its maiden results. On the dual listed stocks Old Mutual drew 11 trades valuing $642k as it added 0.35% to close at $17.1644 (US$2.72), while PPC and SeedCo were inactive as the market awaited further clarity from the central bank.
Following moderate losses in big caps Econet, Delta and Innscor the All Share Index dipped 0.56% to close at 230.44 and the Industrials Index lost 0.57% to close at 768.66. The Top 10 index dropped 0.94% to close at 226.35 while the Minings Index was static at 291.49.
Tightly held copper mining stock CAFCA led the top gainers with a 13.64% rise to settle at $1.25 (USS$0.20) in three trades valuing $2,625. Insurance group First Mutual Holdings added 11.1% to close at 20 cents, bringing its YTD up to 33.3%. Industrial concern ART recovered 9.1% to close at 12 cents, bringing market up to $52.44 million. Consumer stock Dairibord added 7.4% to close at 29 cents to push its YTD up to 76.29%. Another insurance group Zimre Holdings added 6.8% to close at 6.45 cents, leaving its YTD at 151.95%.
Starafricancorporation suffered the biggest loss with an 8% drop to close at 2.3 cents and bring its YTD down to 76.92%. Econet Wireless switched to loss with a 1.95% to close at $2.4005 (US$0.38), leaving its market cap at $6.2 billion. Industrial holding Innscor shed 1.82% to close at $2.798 (US$0.44) leaving its market cap at $1.57 billion. Consumer stock Simbisa shed 1.8% to close at $1.3012 (US$0.21) bringing its YTD down to 79.33%. Beverages giant Delta lost 1.77% to close at $3.8413 (US$0.61) leaving its market cap at $4.89 billion.
- finx
Tags: Rates,


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