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Equities outperform inflation rate


Equities outperform inflation rate



ZIMBABWE’S equities market registered strong growth during the first quarter ending March 2022, as investors seek value preservation against the backdrop of rising inflation.


The Zimbabwe Stock Exchange (ZSE) All Share Index closed the quarter at 15 858.92 points, advancing 47% year-to-date. Top 10 counters contributed significantly to the overall market’s performance as the Top 10 Index advanced by 54% year-to-date.

The Top 10 and Mining indices advanced 54% and 28%, ending the quarter at 10 476.38 points and 10 015.94 points, respectively. Monthly stock market returns largely out[1]performed month-on-month inflation in the first quarter of the year.

“The market’s quarter-to-date performance was largely in the green, with the majority of the counters on the stock market registering a growth in price compared to their December closing prices,” FBC Securities said in its quarterly report.

The first quarter of the year saw the overall All-Share Index rising above the inflation and exchange rate movement, on the back of strong demand, primarily from the need for value preservation.

The securities firm said following the introduction of the incremental export incentive scheme, which ensures 100% retention on incremental export proceeds, appetite for Victoria Falls Exchange (VFEX) listing began increasing, particularly in the mining space.

 “Activity on the foreign currency-denominated bourse (VFEX) improved during the quarter, with volumes traded totaling circa 95.71 million, while total value traded equaled US$5.28 million,” the report reads.

“There was notable interest in Bindura Nickel Corporation as it accounted for most of the trades recorded. Of the total value and volumes traded on the VFEX during the first quarter of the year, Bindura Nickel Corporation contributed 92.70 million (97%) and US$4.62 million (88%) of the totals, respectively.”

 The first quarter of the year saw the launch of two new Exchange-Traded Funds (ETFs) on the ZSE. The three ETFs currently available on the market include the Datvest ETF, Morgan & Co ETF and the Old Mutual ETF.

 “ETF price growth relatively slowed down going into end of Q1 (first quarter), however overall sentiment was positive. There has also been some profit taking driven by a rally in other asset classes, specifically developments in the parallel market,” the report reads. — STAFF WRITER.

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