ZSE weekly review

Published: 17 September 2013

The Industrial Index posted a 3.6% gain during the week under review compared to largely indifferent trading in the prior week.

Firm bids were recorded in the banking and insurance sectors where FBCH gained 10% and FMHL gained 4%. The retail segment also posted positive numbers led by gains in OK Zim (+9.8%) and Truworths which gained 8.3%.

Other notable gains were record in Econet (+8.1), Delta (+6.2%), DZHL (+5.6%) and BATZ (+4.2%). The mining index gained 4.6% on the back of strength in Rio Zim (+25%) irrespective of weak performance in Hwange (-11.1%) and Bindura (-19.3%).

Total value traded was up 23.5% to $8.7m from $7m the week before with foreign sales dominating trade during the week. Net foreign divesture of $0.7m was witnessed during the week.

Year-on-Year(y-o-y) inflation rose for the month of August led by non-food items which rose 1.44% pushing up annual inflation to 1.28%. Food and non-alcoholic beverages inflation prone to transitory shocks stood at 0.94% on a y-o-y basis.

On a month on month (m-o-m) basis food and alcoholic beverages gained 0.23% to minus 0.9% in August 2013 while the non-food monthly inflation was up 0.23% to 0.23%. We expect inflation to remain in the ultra-low regions of 1.5% to 2.2% until the end of the year due to the weak rand in South Africa.

However this is likely to negatively impact the balance of payment position of the country due to net imports from South Africa.

The key to maintaining such a low inflation rate is the multicurrency regime the country is currently using and we expect the government to retain the use of multiple currencies in immediate future.

However we cannot completely rule out the return of a local currency which would initially co-exist with hard currencies.
- Imara Edwards