ZSE weekly review

Published: 15 October 2013

The industrial index recorded a full month of bullish trading led by blue chip and mid tier stocks.
The industrial index was up 2.1% w-o-w to 212.68 points and it is fastidiously closing in on the all time high of 233 points set on the 1st of August 2013 before a precipitous drop after the election results.

After two weeks of heavy trading, the week under review saw a sharp reversal of fortunes after recording a weekly turnover of $5.9m compared to $20.3m recorded in the prior week.

With buyers still firmly interested in blue chip counters while sellers look exhausted, we expect the industrial index to have the traditional October surge to surpass the 233 points mark.

The market cap breached the $6.0bn mark and with Delta and Econet expected to report reasonable numbers this month the gauge can only go up.

Other measures of value indicate that the industrial index still have room to grow with a PER of 11x and dividend yield of 1.5% compared to a peak of 11.6x and 1.4%, respectively.

Elsewhere, the Minister of Finance, Mr. P. Chinamasa is attending a meeting with the IMF and the World Bank where engagements over technical support are ongoing.

Zimbabwe entered into a technical support arrangement with the Breton Woods institutions as a way to be readmitted and enable the country to access the much need financial support.

Indications from the Minister are that the talks are going smoothly and Zimbabwe is committed to the programme and the country will expedite the implementation of the policy measures as enunciated by the two institutions.

This commitment by the Government of Zimbabwe is fast shifting sentiment regarding the economy and the country in general by investors.

In Imara Edward Securities' view, the economic growth rates expected with engagements from the Breton Woods institutions is much higher than without any technical support. From a portfolio perspective this might be a new dawn and there can never be a better time to invest in Zimbabwe if these engagements are consummated.
- Imara Edwards Securities