The local equities market maintained upsurge in the week rising by 39.6%, its highest weekly gain ever, to settle just above the psychological 400 points mark 400.03. At this index level, the stock market’s capitalization has swelled to near the $10 billion mark. Stocks now appear overvalued by any reasonable measure and fears are that they are now flying close to the sun.
Over 75% of the market’s active stocks are trading ahead of their conservative multiples valuation and net asset values likewise. Despite valuation concerns, there is still firm demand for equities and investors are becoming more averse given the worsening margins in market discounts for competing money market alternatives relative to the USD which diminishes the alternatives allure.
A total of 46 counters exchanged hands in the week, up from 41 of the prior week exchanged hands in the week. Of the active 46 counters, 42 went up while 1 eased with the remainder sailing stable. The margin between the risers and fallers was the widest since dollarisation, a signal of demand strength. Brickmaker Willdale posted a very strong comeback rising by 185.7% in the week to settle at 1c. Sugar processor Star Africa, which has also been a laggard in the current rally extended its gains in successive session to cumulatively rise by 84.7% to settle 2.42c.
The late dominance of penny stocks and loss makers showing the full value status of the market as investors reach to the bottom of the market in search of value. Pearl went up 20% to 4.08c after reporting a decline in revenue of 11% dragged by underperforming rentals. Parent FML which also released a set of weaker core results sailed stable.
Proplastics improved by 13.3% from the prior week to 7.50c after the company reported a threefold increase in profit from the same period last year. Profitability was mainly impacted by increased sales volumes and lower finance costs. RioZim which also released its interims, rose by 7.5% to 73c. The company’s revenue grew by 16% to $38 million on the back of a 13% increase in gold production from the same period prior year following the acquisition of the Dalny mine and commissioning of the Cam and Motor mine. Heavies Econet, Delta, Seedco, Padenga, Simbisa, Old Mutual, Natfoods and BAT maintained their rally in the week. PPC was stable after receiving an offer from Dangote Cement indicating its firm willingness to acquire the company’s issued share capital. General beltings was the only loser in the week with a loss of 9.1% to 0.5c.
Turnover for the week came in at $10.3 million which is 6.11% below last week. Padenga was the top value contributor trailed by Delta, Simbisa, OK and Econet in that respective order. Average daily turnover for the week came in at $5.6 million which is higher than $2.1 million attained in the prior week.
