The ZSE bull run stretched further to strained levels as hedge-seekers scurry for whats left of the stock market. With almost the entire market clearly looking overbought, investors are squeezing-in paying a premium for the envisaged stocks cover with zero inclination to “fundamentals”.
On Wednesday the mainstream index rose by a record 10.32% to settle at a new all time high of 347.63. It is the single largest gain in a session since January. The daily upsurge took the year to date gain to 140.6% a record return on a global scale.
In distressed periods investors have tended towards the Old Mutual Implied Rate in valuing stocks and the carrying stock values relative to the OMIR now reflect a huge margin beyond the implied rate which suggests an overvalued market.
By either book values or matrices valuations, the margins are even now worse off. The possible rationale to those participating is that they view it as better off losing value in equities which are real assets, at a slower rate than losing value at a faster rate while holding monetary assets. This phenomena speaks to the prevailing deep RTGS and Bond notes discounts, relative to the hard currency, in the market.
Elsewhere laggard Star Africa led the risers in the session today notching by 67.18% to settle at 2.19c. Brickmaker Willdale which was the top riser in the prior session went up by a further 58% to close the session at 0.79c a record high price level.
Ariston and ZPI trailed with 52.14% and 37.22% gain to 2.13c and 2.47c respectively. Since the beginning of the year, the duo has gained 508% and 147% in that respective order.
Econet recouped earlier losses on rebounding by 16.2% to 71.11c. Heavies Seedco, Delta, Padenga, Innscor and Simbisa remained the market movers, helping drive the index upwards.
Bindura recovered by 9.38% to 3.50c, in turn, driving the mining index upwards. In total 24 counters went up while not a single counter eased.
Turnover improved by 429% to a record $9million from the prior session, Padenga, which has been at the heart of the current rally where it has gained over 530%, contributed the most turnover and the stake sold reflect some profit taking. Delta, Simbisa, Hippo and Meikles followed in terms of turnover contribution in that respective order. The total number of shares in the session came in at 14.1 million.
Equity Axis is an online financial media service platform focused on African markets offering real-time stock quotes, news, analysis and data.