ZSE investors dump stocks for cash as #COVID19 hits

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  • Indices slump in Thursday session
  • Investors are opting for liquidity
  • Truworths led the fallers of the day after letting go 19.78%

It was a bloodbath in Thursday’s session as all indices closed in the red. The mainstream All Share Index dropped 2.80% to 466.94pts while the Industrials slumped 2.75% to end at 1548.73pts, in a COVID19 shortened trading session,

Investors are opting for liquidity and therefore choosing to trim portfolios given the uncertainties ahead. The coronavirus has since forced businesses to trim working hours while others have gone into partial lockdown. If the crisis persists most businesses would need a cash cover to sustain operations while some businesses may grossly underperform overall which reduces the underlying value of the same.

Against these expectations, the ZSE Top 10 Index tanked 3.32% to close at 379.82pts, as heavy counters continued to decline as the resources index lost by the biggest margin of the 4 indices giving up 5.21% to settle at 718.91pts.

Retailer Truworths led the fallers of the day after letting go 19.78% to $0.0722 with Dawn following after a 19.63% slide to $0.0815. Nickel Miner Bindura lost 14.06% to see it trading at $0.3000 where demand could be established. The duo of ZHL and Lafarge capped the losers set after retreating 9.51% and 9.37% each to close at $0.3846 and $3.0000 in that respective order.

Diversified group TSL was the session’s best performer on surging 19.93% to close at $1.8050. Dairibord added 1.61% to settle at $0.6300 on firm demand while National foods gained 1.06% to close at $22.2000 Innscor completed the riser’s list with a negligible 0.05% gain to close at a value of $7.7596.

Out of thirty eight active stocks, four gained whilst twenty eight lost ground , leaving the remainder of six trading unchanged. Total value traded edged 61.14% to $28.98m as volumes exchanged ballooned 102.57% to 8.22m shares. Simbisa emerged the session’s top value contributor trailed by Econet and Delta. Foreign purchases stood at $0.11m while sales were $5.24m, as capital flight continued.

The recent trend has been, when initial cases are reported in an economy or region, markets jerk southward and investors reel as was the case when investors lost over US$2 Trillion on global markets when initial cases were reported in Europe over a fortnight ago.

Trading at the Nairobi Securities Exchange was 10 days back halted after the NSE All-Share Index plunged by more than 5% as investors lost US$2.2 billion upon the reporting of Kenya’s first Coronavirus case. When news broke in RSA of their first coronavirus case over 2 weeks ago investors lost over US$60 billion on the JSE.

It was late Friday (the 20th of March) when Zim reported its first coronavirus case and in line with international trends, the local bourse would have plunged on Monday the 23rd but it gained 2% to close at 492.42 points, moving up on Tuesday to close the day at 496.28 points despite reports of the first #COVID19 death.

On Wednesday, the market moved south shedding 3% to close at 480.41 points

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