HARARE – Zimbabwe Stock Exchange shares rallied strongly to new record highs on Tuesday as investors continue to hedge against inflationary pressures following the admission by Government that RTGS, bond notes were not at par with the US$ and that they were leaving it to market forces to determine the true value. Already, since the announcement of the Monetary Policy Statement last week, where the governor Dr John Mangudya separated foreign currency accounts from RTGS balance, parallel market rates have rallied to as high as 300% to the US$.
However, Dr Mangudya maintained the official exchange rate at 1:1, a position which has left many companies in a conundrum with regards their pricing structures. At what price do they sell their products, most of which have an imported component? Analysts believe that that the constant loss of value of RTGS/Bond notes present the biggest risk to companies at the moment. Already products such as beer and bread are in limited supply while on some lines the prices have more than tripled.
At the close of Tuesday’s trading session, the market, which had been somewhat lacklustre before the Monetary Policy announcement last week, rallied to new highs on its market cap to $16.7 billion, beating the previous record, which was set last year, just before the ouster of President Robert Mugabe of $15.16 billion.
The All share index and the Industrials index both went up 13.23% and 13.18% to close the second session of the week at 151.99 and 512.09 respectively. The ZSE Top Ten Index rose 14.82% to close at 161.52 after strong trades in Econet, Delta, Innscor and Old Mutual.
Beverages concern Delta, which has not effected any price increases went up 19.95% to 303.50c. Telecoms giant Econet maintained the buoyancy seen after it announced that it will unbundle its fintech unit and convert debentures into equity. The counter put on 19.31% to settle to 203.71. Old Mutual was up 19.93% to 884c as the group prepares to unbundle its banking unit NedBank. Innscor, which is targeting to be a $1 billion revenue company in the next 15 months, rose 19.86% to 169c.
The Minings Index was up 1.40% to 161.52 after gains in Bindura Nickel and RioZim. RioZim put on 0.71% to 141c after the group announced its intention to sue the central bank for not sticking to its directive on foreign currency retention. The group said it had only retained about 15% since 2016.
Total turnover was at $9.6 million as 20.6 million shares exchanged hands in today’s session. There were no foreign sells, but foreign buys amounting to $44 752.