The ZSE losing streak continues as foreigners exit market

  • ZSE tanked over 5% in the past week
  • ASI hits 8 successive sessions in the negative
  • A cumulative ZWL45billion has been lost since the market resumed last week
  • Foreign selloffs have been dominant in sell-offs

The ZSE has remained in losses since resuming trades early in August. The market began in freefall as sellers dominated the market after a 5 week of trading suspension.

Last week the market pared 16% according to the ZSE All Share index on a cumulative basis which is the worst weekly outturn in 1 year. In the 3 sessions of this week, despite a holiday break earlier this week, the freefall is unabated with losses in the new week tallying 5.01%. Losses have been wider across the market led by heavy cap counters which were the anchors of significant gains accrued in the first half period of the year.

A cumulative circa ZWL45 billion has been lost since the market resumption early last week as stocks appear less and less a safe haven in the face of state interference. Over ZWL200million has been withdrawn by foreign investors in just 8 sessions, while about ZWL64.5million came in as foreign inflows.

Data shows that foreign selloffs have been dominant and over 50% of disposals post the suspension has been driven by foreigners who have been able to move their portfolio divestments in the latest trading incidence in the interbank.

The interbank has been more attractive due to lower exchange rates relative to the parallel market and the Old Mutual Implied Rate. This would deduce to better net returns buttressed by a strong showing of the overall ZSE market in the first 6 months of the year.

In Friday’s session, the market tanked 0.91%, which is 2.6 points below the average fall since trade resumption, a trend likely to persist into the following week. The financial sector, however, mounted  1.9% in today’s trades after ZBFH and CBZ finished the session higher than the prior.

A total of 37 counters exchanged hands in Friday trades, 5 ticks up from 32 recorded in the previous session’s close. Of these 37 active counters, 12 were risers and 20 were laggards, leaving a remainder of 5 counters to sail stable.

Only a total of 11 counters, up from 8, gained value in the week, out of 56 active stocks. Notably, only RioZim represented miners on the list. On the contrary, a total of 31 stocks lost value in the week under review and at least 15 of the counters suffered double-digit losses.

The market traded a total of 32.5 million shares during the week valued at $250.70 million. Leading the top value contributors was Delta and CBZ respectively for a second time coming, with Mashhold, Innscor, and Padenga trailing behind the duo. 

In an earlier update before the resumption of trading in August, Equity Axis analysts had projected a selloff and foreign exit from the market. According to the projection: selloffs would be a reflection of the new interbank foreign currency market which has seen improved flows since the end of June.

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