Zimbabwe stocks lost some ground Tuesday as the benchmark index slid by 3.27%, bumping market optimism created a raft of strong company results.
The all-share index edged down by 3.27% to 11,146.97 points. A total of 617.27 million shares worth ZWL$4.12 billion were traded today. Hospitality group RTG led on value traded at ZWL$3.44 billion. The other chunk was mainly restricted to heavyweights with beverage maker Delta contributing ZWL$ 264.82 million, Econet at ZWL$202.16 million and Innscor at ZWL$122.31 million.
Market cap was 3.97% to ZWL$1.44 million.
However, sentiment, as measured by market breadth, was negative, as 25 stocks retreated, relative to 8 gainers.
Losses in heavyweights, Econet, NatFoods and OK Zimbabwe saw the Top 10 Index falling 3.69% to 7,030.83 points. Telecoms giant Econet led the heavyweight fell 10.33% to ZWL$63.0000. NatFoods and OK Zimbabwe were down 8.57% and 8.11% to ZWL$1.600.0000 and ZWL$26.5000 respectively.
Hotelier African Sun led the losers’ chart by 16.40% to ZWL$8.0000. The company issued a notice relating to the acquisition of the entire issued share capital of Dawn Properties Limited in exchange for an issuance of African Sun Limited ordinary shares listed on the Zimbabwe Stock Exchange for an exchange of 1 African Sun ordinary share for every 4 Dawn ordinary shares held.
“The Boards and Management of African Sun Limited and Dawn Properties Limited wish to advise their valued shareholders and members of the public that the allotment of ASL shares to the remaining DPL shareholders who accepted ASL’s subsequent Offer to acquire their DPL shares on a basis 1 ASL ordinary share for every 3.988075946 DPL Ordinary shares held via the Drag Along and Squeeze Out in terms of Provisions of the Companies and Other Business Entities Act, Chapter 24:31, will take place once ASL has received clarity from the Zimbabwe Revenue Authority (“Zimra”) regarding the treatment of the Capital Gains Tax to be applied to the sale of the remaining DPL shareholders’ shares to ASL.
“This follows the pending share trade being executed on the basis of DPL now having been delisted, as was the case when the first allotment occurred,” reads the notice.
The Medium Cap Index slid 2.40% to 21,089.48 points.
In the green was Nampak and First Capital which added 9.54% and 7.79% to settle at ZWL$11.0000 and ZWL$3.4000 in that order. NMBZ, which reported a loan book growth of 39% on rate stability, gained 4.45% to ZWL$10.5000. RTG climbed 2.76% to ZWL$5.6600.
Again Medtech recorded the highest price gain of 5.141.59% to close at ZWL$55.0000.
Bucking the trend, Unifreight lost 11.76% to ZWL$30.0000. As a result the Small Cap Index fell 3.35% to 388,659.47 points.
CAFCA, the country’s biggest cable manufacturer, says full year volumes rose 49% to 2604 tons compared to the same period last year.
In the year ended 30 September 2021, local sales surged 57% helped by post Covid-19 improvement in the economy.
Export sales were up 16%.
In historical terms, turnover was up threefold of which 49% can be attributed to volume increases and the balance to sales mix, the increase in the price of copper and some to inflation.
“Exports are translated at the auction exchange rate ruling at the time of invoicing,” said the company in a statement accompanying the results.
Profit before tax at 29% of turnover is well above the company’s normal benchmark. This is attributed to the impact of holding high manufactured stocks made at old prices.
Full year balance sheet improved by ZWL$656.3 million with ZWL$566.4 million of the profit being reinvested back into stock. It said debtors are mainly US dollar denominated whilst it has no foreign liabilities.
It had a net cash position of ZWL$108 million largely having to hold cash to cover foreign currency auction backlog.
“Despite detailed interrogation of the mechanics of applying the Standard and the indices used, the inflation adjusted financial result has not been commented on as the profit is made by not consistent with both the historical cost profit extrapolation nor the profit obtained by calculating open and closing balance sheets in the US$.”
It did not declare a dividend.
“Cash is being set aside to cater both for the auction system requirement and the impact that future hyperinflation may have on having to finance working capital,” it said.
In the outlook, the company said: “We have budgeted for a modest increase in volumes in 2021/22 against a background of uncertainty in the foreign currency availability and pricing and the impact of increased competition in our regional markets.” Cafca did not trade today.
Cement maker Lafarge completed investigations and assessment of the damage caused by the collapse of the roof on one of the company’s mills on 11 October 2021.
The company said it has been working diligently on the restorative works necessary so that normal operations may resume as soon as possible.
“However, during the course of having the necessary works carried out, the production of cement will be disrupted,” it said.
“Therefore, shareholders are advised that the disruption of cement production as well as the cost of the ongoing repairs will have a negative material effect on the financial results of the Company for the remaining quarter of 2021.”
It did not trade today.
The Mining Index suffered the most today as it succumbed 4.49% to 6,297.90 points – Harare