• Stocks close in the black in week characterised by choppy trading
• USD denominated bourse launched
• ZWL pares against USD after 7 weeks of steady recovery

Overall Comment:

Trading in the week under review was largely characterised by volatility as the market struggled to find direction. However, by the end of the week, stocks were slightly up compared to the prior week close. The ZSE All Share Index notched 1.86% to settle at 1521.22. The weekly gain came on the backdrop of the Victoria Falls Stock Exchange (VFEX) launch.  The VFEX which launched on Friday in Victoria Falls is a USD denominated stock exchange meant to attract local and international companies seeking forex for capitalisation, explorations, mining development and expansion.

Meanwhile the local unit pared marginally against the greenback after 7 weeks of steady but mild recovery. Demand for stocks typically varies inversely to the exchange rate such that when the exchange rate worsens, stocks move into the positive. We expect the market to largely continue tracking exchange rate dynamics ahead of company specific fundamentals. For the remainder of the year we see stocks performing steadily but with more downside pressure, given the stabilising exchange rate. We are however of the view that exchange rate dynamics may shift early into 2021 thus driving stocks up.

Stocks Performance:

Up from 43 in the prior week, an aggregate of 45 counters exchanged hands in the week under review. 20, of the total, emerged as risers against 19 fallers. Fidelity led the risers pack for a 2nd consecutive week on notching 20% to close at 138c while Willdale tied the gains at 20% to close at 24c. Peers ZBFH and CBZ surged 19.3% and 17.6% each to settle at 1789.48c and 4469.98c in that order. Powerspeed added 16.1% to settle at 180c with ZHL closely trailing on adding 16% to close at 290c. ZHL is on the verge of consolidating ZPI after the latter’s shareholders approved share swap offer. African Sun added momentum to prior week gains by 15.3% to close at 181c after Dawn shareholders approved acquisition offer. The hospitality entity offered to acquire the entire share capital of Dawn Properties through a share swap. Truworths added 11.5% to settle at 14.60c while the duo of FMP and Star Africa capped the Top 10 risers set at 235c and 18c apiece after notching 6.8% and 5.9% respectively.

Partially offsetting the gains were losses in mainly mid tiers led by BNC which extended losses to a 2nd straight week easing by -24.5% to settle at 301.82c. Nampak wholly countered prior week gains by -19% to close at 85c while Proplastics shed off -17.8% to close at 492.59c. The duo of RioZim and Econet buttressed prior week losses by a further -6.6% and -5.8% respectively to settle at 830c and 424.29c apiece. Zimpapers reversed prior week gains by -5.6% to settle at 68c while Padenga and Mashhold closely tumbled by -5.5% each to close at 1415.84c and 63c in that order. RTG ticked up from being 10th worst performer in the prior week to 9th worst performer in the week under review on slumping by -5% to settle at 190c leaving Axia to cap the Top 10 laggards set at 375c/share upon softening -4%.