Published: 12 May 2025

Securities firm IH Securities has projected that agile and adaptive companies on the Zimbabwe Stock Exchange (ZSE) will outperform their peers, as the local bourse continues to respond to volatile money supply dynamics and shifting exchange rates.

In its April 2025 monthly market report, IH Securities noted that the ZSE's market capitalisation dipped by 7.12%, falling from ZiG62.53 billion in March to ZiG58.08 billion. This drop coincided with a slight depreciation of the local currency, from US$1: ZiG26.76 in March to US$1: ZiG26.81 in April.

"In our view, performance of the ZSE still depends heavily on money supply dynamics," said IH Securities. "Given the delicate monetary space with the likelihood of policy shifts, we are in favour of agile companies that can navigate the current environment and, in the absence of capital gains, those that are consistent dividend payers."

The All-Share Index declined 7.38% during the review period, while the Top-10 Index showed more resilience with a 6.54% drop. In real terms, market capitalisation fell to US$1.66 billion.

Among top-performing counters, Nampak Zimbabwe Limited led with a staggering 107% increase in share price, followed by TSL Limited, which gained 42%. TSL is currently finalising a US$25 million transaction to acquire Nampak Zimbabwe from its South African parent, Nampak Limited.

Conversely, Mashonaland Holdings Limited (Mashold) recorded the worst performance, shedding 24% month-on-month. This came after the real estate firm reported a 7% drop in profit after tax to US$3.72 million for the year ended December 31, 2024.

Despite the overall market decline, activity on the ZSE improved. Share volumes surged 62.03% to 150.50 million, with Star Africa leading in trade volumes (57.72 million shares), followed by Proplastics (30.47 million shares). The value of trades also rose 9.33% to ZiG268.27 million in nominal terms, while the average daily value traded in real terms rose 12.49% to US$0.37 million from March's US$0.33 million.

Delta Corporation and Econet Wireless Zimbabwe remained dominant in terms of traded value.

Meanwhile, the Victoria Falls Stock Exchange (VFEX) posted contrasting fortunes, with a 3.62% growth in market capitalisation and a 3.94% gain in its All-Share Index. IH Securities attributed this stronger performance partly to buoyant global gold prices, which positively impacted gold-linked counters on the VFEX.

"Money supply dynamics have played a significant role in the ZSE's subdued performance as tight monetary policy continues to squeeze liquidity," the report noted. "However, rising gold prices have provided a welcome uplift on some VFEX counters."

As policy uncertainty and liquidity constraints persist, investors are being advised to focus on companies with strong adaptability, reliable dividend payouts, and strategic exposure to resilient sectors.
- newsday

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