ZSE falls as RBZ readies corporate OMO Bills to mop up excess liquidity

 ZSE falls as RBZ readies corporate OMO Bills to mop up excess liquidity
Published: 18 March 2020
The stock market fell on Wednesday but at a much slower pace as investors have adopted a somewhat wait and see approach until the dust settles on the ongoing currency reforms that Treasury and the Reserve Bank of Zimbabwe are pursuing.

The Reuters forex trading platform went live today although under a managed float amid expectations the local dollar will depreciate further to levels within the parallel market rates. Short term corporate OMO bonds are expected to be launched next week as part of efforts to mop up excess liquidity being held by corporates and other large holders of ZWL.

At the close of trades, the All Share Index fell 1.33%  to 474.42 while turnover improved slightly from yesterday at $18.07 million. The market breadth remained negative after 19 stocks traded in the red. Total trade count was at 221 while foreign buyers were at $87 043. There were no foreign sellers. With the new interbank rate of 23.49, the market cap closed at the equivalent of US$2.59 billion.

Meikles led the fallers losing 18.18% to 654.55c but with a last transaction price of 640c. The stock 52-week high is at 1000c. Old Mutual pared 0.24% to 3790.79c in turnover worth $2.22 million on trade count of 11 amid expectations it will not lose further ground as the stock remains a good hedge in an inflationary environment.  Delta shed 2.56% to 631.36c and Innscor was 1.30% down to 799.98 ahead of the imminent release of its interim results.

The losses saw the Top Ten Index close with a 1.07% drop to 393.85 with a year to date gain of 93.39%. Cassava put on 0.89% to 280.79c amid reports the group is expected to configure its system to allow for daily limits which are to be placed on bulk transactions.

PPC Zimbabwe was 10% lower to 400c after 200 shares exchanged hands in two trades. The performance comes in the wake of its trading update where its South African parent reported that cement sales volumes have declined by 15 to 20% due to a weaker economic climate, offset by cement pricing which has been aligned to input cost inflation. EBITDA margins improved to 38% from 35% while the unit continues to meet its debt and is fully self-funding.

The Medium Cap Index shed 1.75% to 666.41 and the Small Cap was 2.14% lower to 1 395.46. Art Corp shed 15.52% to 49c and Edgars fell 14% to 43c.

TSL did not trade. However the group's first quarter trading update says that its group's tobacco related business might be affected by the late start to the tobacao selling season. However other business units are expected to perform above prior year.

On the sub-indices, the Real Estate Index was 7.14% lower to 755.35 although trading in the sector was mixed. ZPI led the risers gaining 20% to 12.60c but First Mutual Properties fell 16.98% to 67c. The Industrials Index rose the most gaining 6.36% to 705.54.

The Financials Index was 1.93% higher led by gains in FBC Holdings, which put on 19.9% to 120c.
- fnx
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