By Tapiwanashe W Mangwiro.
Harare – (News of The South) – Zimbabwe equities market has been on an incredible bull run in 2020 as the flagship All Share Index has risen by 105.7% Year-to-Date (YTD). This has been a case of value preservation of excess liquidity in the market as well as a way to exit the country with little foreign currency through dual listed equities.
The end of February marks exactly one year of the reintroduction of the local currency which is now being traded as the sole legal tender in the country. The year has seen a lot on the local equity market the Zimbabwe Stock Exchange (ZSE) which has since been undervalued by the rapidly deteriorating local currency.
For the month of February 2020 the market realised total turnover of $360 million which is 22% up year on year and 18% month on month. With market capitalisation of $60 billion in February, the market has gained 215% year on year and 39.5% month on month.
Turnover in terms of volumes the month of February had the lower volumes month on month as they were down by 3.9% to 172 million. In comparison with the same period last year, volumes are down 26.2% from 233 million in February 2019.
ASI in February 2020 grew at a slower pace than the rate of January 2020 on the back of a mini-bear at the end of the month. The index managed to absorb the shocks as it grew 42.47% month on month on the back of increased liquidity mid-month. It was also up 219.5% up year on year and YTD rise of 105.7%.
Foreigers have continued to exit the market as is shown by the data released by ZSE. In the month of February 2020 they have sold equities to the tune of $104 million which is 18.2% higher than the total sales for January 2020 of $88 million. However on a year to year basis foreigners sold less in February 2020 as the sales were 56.11% lower.
Buys by foreigners were up month on month on the back of improved activity mid month, as they bought equities worth $50 million, 163.2% better than the $19 million purchased in January 2020. The February 2019 buys were 80% more than the purchases of the recently concluded month.
The market seems to be reporting that foreigners have decodes to stay away from the ZSE as it may be toxic to them and value has been lost in real dollar terms. They continued to be net sellers for a third straight month.
Comments
About Author
