• Wed. Jun 12th, 2024

Equities fall as exchange rate instability poised to derail inflation

ByEconomic Times

Apr 14, 2023

By ETimes

The Zimbabwe Stock Exchange fell for the third straight day on Thursday, shedding 1.58% amid continued confusion over blended inflation.

The southern African nation now calculates inflation using a combination of inflation for prices that are quoted in US dollars and inflation for prices quoted in ZWL$. Prior to then, only products in local currency were used to determine the official rate.

Annual blended inflation rate for the month of March 2023 was 87.6%, shedding 4.7 percentage points from the February inflation rate of 92.3%.

“The current wave of exchange rate instability has the ability to derail inflation, including the blended one, even though it mainly measures US dollar inflation,” the Confederation of Zimbabwe Industries (CZI) said in its March 2023 inflation and currency developments update.

“The current wave is coming at a time of increased political activities due to the upcoming general elections. It is expected that the ZWL$ inflationary pressures are likely to persist over the short term.”

Market breadth, which gauges investors’ sentiment towards trade, closed in the positive as 10 gainers were recorded in contrast to 9 decliners.

Accordingly, the mainstream ZSE All Share Index fell 1.58% to close at 36,206.03 points, while market capitalisation declined by $45.85 billion to $2.98 trillion.

Losses in Econet and Ecocash drags down the Top 10 Index as it lost further 2.15% to close at 20,761.33 points. Econet led the losers table, down 10.05% to end at $164.66. Ecocash followed, slumping 8.82% to close at $48.08.

Conversely, OK Zimbabwe and FBC were up 1.81% and 0.40% to finish at $61.09 and $125.50 respectively.

The Medium Cap Index was off by negligeable 0.04% to close at 80,134.30 points. Starafrica eased 2.59% to close at $1.62. Nampak plunged 2.54% to $30.95. First Capital Bank depreciated by 2.33% to settle at $30.06.

On the other side of the coin, ZHL topped the gainers chart, appreciating by 4.54% to close at $11.00. NMB, which is expected to launch a local remittance service this month, garnered 1.58% to $61.00. Zimplow added 1.01% to close at $36.50.

Investors traded 3 million shares worth $1.35 billion in 165 deals, compared with 3.39 million shares worth $873.54 million transacted in 234 deals previously.

Delta led the volume chart with 1.28 million units as well as the value chart with deals worth $1.05 billion.

The OML ETF suffered the most, plunging 1.85% to close at $10.0190. The Datvest ETF was down 0.54% to close at $1.8400.

On the VFEX, Innscor Africa Limited declined by 2.03% to close at US$0.6318. Axia was 1.39% lower at US$0.0991. Seedco International depreciated by 0.41% to settle at US$0.2900. Simbisa eased 0.21% to US$0.4200.

National Foods gained 0.43% to close at US$1.8100. Padenga appreciated by 0.10% to US$0.2000 – Harare

Leave a Reply

Your email address will not be published. Required fields are marked *