Zimbabwe: ZSE Shares Break Record Levels

Source from:  The Herald (Harare) 10 September 2007 09/11/2007

THURSDAY'S fiscal policy statement helped Zimbabwe Stock Exchange shares break record levels amid piling investor-concern inflation will continue riding firmer this year. In Friday trading, the mainstream industrial index climbed 12,3 percent or 5 467 034.76 points to fresh record highs at 49 957 688.11 points driven by weak inflation predictions. Wednesday, industrials closed down 3,44 percent, ending a six-day straight gain on nervous trading ahead of the supplementary budget. On budget day, the main index lost 0,79 percent before the fiscal policy failed to stop the weeklong equities rally that picked further momentum Friday. Between Monday and Tuesday, the stock market had gained over 25 percent. Minings trashed records jumping 25,65 percent on Friday to all time highs at 36 064 153.49 points, in non-stop gaining action began the previous Wednesday. Average daily turnover Friday doubled to $319,4 billion from $136 billion previously while market capitalisation hit a high of $512,6 trillion Thursday, rising to over $900 trillion at week-end. The budget contained policies likely to have no impact on equity investors. It remained silent on strategies being employed to contain runaway inflation, currently sitting at 7 634 percent at the end of July, year-on-year. Negative inflation has been a plus factor for the stock market in recent years, whose performance has remained ahead of it. Of the main index shares, Old Mutual reported the highest traded stocks in value terms at $28 billion followed by Econet at $24 billion from a selling price of $300 000 per share. At least $13 billion worth of shares were traded at a price of $8 500 in CFI Holdings Ltd. In Friday trading, tobacco processor, BAT paced advancers rising $200 000 to $650 000 followed by OM that gained $136 000 to $751 000. Cement maker, PPC closed up $100 000 while Meikles and Innscor pushed up $80 000 and $15 000 respectively. Other notable gains were reported in industrial conglomerate TA Holdings Ltd, Hippo Valley, Circle Cement and Kingdom. Liquor producer, Afdis Ltd closed up $5 000 at $35 000 after reporting Wednesday half-year to June net profit rose to $46 billion, up 11 500 percent from a year ago. Earnings per share stood at $505 while the group said it will pay an interim dividend of $2 per share. The counter is currently trading at a historic price to earnings ratio of 69.x, which makes it relatively cheaper when compared to peer, Delta whose PE stood at 257x Friday. Of the ZSE stocks, the only shakers were Radar down $4 000 to $20 000 while telecommunications firm Celsys dragged $10 to $290. Other counters traded positively within $4 000 of their previous levels. In minings, nickel producer, Bindura led gainers rising $40 000 to $160 000 helped by news Finance minister, Dr Samuel Mumbengegwi had devalued dollar to $30 000 against the US dollar. Previously, the local unit changed at $250 against the greenback. While the review was minimal when compared to the parallel rate of over $250 000, exporters certainly have something to smile about, as the exchange rate relaxation means more earnings for their coffers. Other gains in minings were recorded in Rio-Zim that finished higher $40 000 at $400 000. Hwange traded unchanged at $45 000 after the coal producer said Thursday it will repay over $5 billion to coal merchants whose coal it could deliver following the cancellation of the coal-merchants role nearly two months ago. Analysts predict the stock exchange rally will continue in the short-term fuelled by weak inflation, and generally lack of other inflation-beating investment options. Enditem