Industrials falter in dull midweek trades

Published: 02 April 2014

ZSE's Industrials waded back into the negative territory during Wednesday's dull trading session where only 13 counters recorded trades out of the active 62.

There were no counters to trade in the positive but 3 closed in the red while 10 remained unchanged at previous levels. The Industrials Index dropped 0.32 points or 0.18% to 176.33 with overall bias skewed toward the downside.

Blue chips Delta. Econet and Innscor traded unchanged at 115c, 62.52c and 62o respectively. Heavyweight retailer OK Zimbabwe closed buyers and sellers only at 19 and 20c.

The Minings Index remained stable at 29.51 as Bindura closed unchanged at 1.3c.

Significant volumes in Delta and Econet saw the daily market outturn rising to $1,582 million on a volume of 3.014million shares from yesterday's $825 664 on a volume of 2.181 million shares.

ABC closed sellers only after CEO Doug Munatsi told a press conference last night that the bank is expecting $100million equity capital injection from Atlas Mara soon after the deal is concluded with the transaction expected to transform the Pan African banking group.

The top loser on the market was Mash, dropping 0.32c or 12.80% to 2.18c while Ariston eased 9.09% to 1c and Pearl Properties closed 0.38% weaker at 2.64c.

Meanwhile TSL has finally squeezed ABC out of the top 10, in part due to having another 6.5 million shares in its authorised capital, and in places 11-14 are banks - ABC, CBZ, FBC, and Barclays. Hippo has slipped to 9th position and Natfoods has jumped to 7th, over Old Mutual. The top 6 are unchanged. Other companies to add were Barclays (80 000), Delta (576 000), OK (60 000), and Pioneer (51.5 million) following the Unifreight deal.

After the recent earnings season and corporate activity, we have made some changes to the target market cap valuations. All in all, there is an upward adjustment of $207 million to $56.26 bin for the following reasons:

ABC rises to $200 million from $150 million following the Atlas Mara buy in which values the group at $210 million, Afdis rises to $30 million from $20 million, Astra has been increased to $20 million $15 million following the Kansai Plascon deal, CFI rises to $60 million from $40 million following the rezoning of municipal land, FBC has been increased to $80 million from $60 million as it consolidates its position as the fifth biggest bank in the market

Fidelity Life rises to $30 million from $20 million in light of its Southview development, Natfoods has been lifted to $150 million from S120 million due to consistently good performances, which has seen it cement its position in the top 10 companies, OK we put at $180 million from $150 million as we believe the market is not wrong with its current valuation, the Old Mutual move to $140 million is in line with the market price (PPC has been cut to $40 million for the same reason), and Padenga's recent results justify an increase to $50 million from $35 million.

Pioneer we have doubled to $30 million from $15 million following the Unifreight deal, and TSL's value unlocking initiatives have seen the market cap nearly triple. We have doubled our value to $100 million, a discount to current price.

We've taken $100 million off the Cottco valuation following the unbundling of SeedCo. and Radar to $10 from $30 million following the dividend in specie of the Border shares. Hwange has been slashed to $25 million from $50 following its record loss. Suspended shares and those with delistings pending have been reduced to $1 million.

In today's trades the Datvest All Share Index dropped 0.17 points or 0.15% to 119.31 while the FBC ZSE-10 Index remained unchanged at yesterday's level of 126.41.

The Property Index dropped a significant 5.13 points or 5.29% to 91.95 following losses in Mash and Pearl Properties.
- zfn