Overall Comment
• ZSE closes in losses as profit taking takes toll
• Heavies leading the decline after weeks of rallying
• Positive outlook projected following the announcement of an expansionary budget
A rebound in the week closing session was not sufficient to reverse 4-day losses and resultantly the market closed in losses. The weekly loss snapped a 3-week rally, as the market went into profit taking mode following weeks of recovery. The isolated gains on Friday came after the minister of finance announced the 2021 budget, which was seen as expansionary and attempts to reverse 2 years of recession. Economic growth is projected to turn positive at 7.4% in 2021 before slowing down to an average of 5% over the succeeding 2 years. The growth recovery is premised on resurging demand post COVID-19 and a non-recurring drought. It is also expected that price and currency stability prevailing since the third quarter of 2020, will create a stable macro environment which is ideal for economic growth. Government’s adjustment of the civil service wage bill will also increase projected spend and overall aggregate demand which would likely stimulate production.
Our projections are that 2021 would likely come in at a more favourable outturn compared to 2020 and thus result in a positive economic growth. Our forecast is however more conservative given the fragility of the environment and the increased number of uncertain factors which could tilt the economy in either direction. For listed equities, rebounding aggregate demand will likely result in recovering volumes and thus more drive the market to more favourable valuations.
Stocks Performance
An aggregate of 48 counters exchanged hands in the week under review from which 20 emerged laggards. Delta beverages, which came out as best performer in the prior week, emerged the worst performer in the week under review upon slumping -24.8% to close at 1729.30c, as investors took profits. The company posted strong volumes recovery in key segments for the quarter and half year period to September after successive quarters of volumes loss. Fidelity trailed in losses, easing -19.9% to settle at 120.08c while NMBZ extended losses from prior week by a further -19.1% to close at 210.04c. Mashhold countered its prior week gains by -9.3% to settle at 53.70c, closely followed by the gold miner, RioZim, which plunged by -9.1% to settle at 772.60c. Padenga halted its 4-week long streak of gains on dwindling -8.7% to close at 1503.71c while Innscor shed off -8% to settle at 2300c. CBZ buttressed prior week loss by a further -7.6% to settle at 3695.01c. Simbisa softened by -6.8% to close at 679.64c while OK Zim partially reversed prior week gains by -5.3% to settle at 542.19c.
On the downside, a pack of 22 counters came out as risers and these were led by Masimba which gained a whopping 88% in the week to close at 504.94c. The top performer was trailed by a 47.1% gain in Nampak which closed at 125c while Hippo surged 31.6% to settle at 2180c. Unifreight notched by 19.7% to settle at 15.50c. The duo of banking peers, First Capital Bank and ZBFH, surged by 16.7% each to settle at 60.68c and 1750c respectively. ZBFH wholly reversed its prior week loss of -14.3%. Turnall added 13.1% to settle at 68c while African Sun countered its prior week loss by 11.6% to close at 167.45c. The duo of Willdale and BAT capped the Top 10 risers set upon notching 9.8% and 8.3% apiece to close at 27.25c and 23550c in that order.
