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Zimbabwe’s two stock exchanges, ZSE and VFEX suffered a significant drop in market capitalisation in February compared to the prior month, as investors remained cautious amid delays in the announcement of a new Monetary Policy Statement (MPS).
The Reserve Bank of Zimbabwe has yet to present the MPS, an important document that central banks use to manage economic fluctuations and achieve price stability, full employment, economic growth, and balance of international payments. The delay has created high levels of uncertainty in the market.
The Zimbabwe Stock Exchange (ZSE) lost 21% of its market capitalisation in United States dollar terms to end at USD 2,4 billion, while the Victoria Falls Stock Exchange (VFEX) shed off 3,16% to close the month at USD 1,2 billion. The ZSE recorded about USD 7,99 million) of total monthly traded value compared to USD 8,51 million recorded in January. VFEX recorded a monthly turnover of USD 4,133 million compared to USD 4,132 million recorded in January.
The exchange rate is likely to stabilise in March before resuming an upward trend. This stabilisation is likely to occur shortly after the announcement of new monetary policies addressing structured currency. We also anticipate increased activity on the VFEX in March.
The ZSE All Share weakened -3,16% over the month with major losses in the Top 15, which waned by -7,70%. Losses in the Top 10 were -4,29%, while the medium cap advanced 14,65%. The small-cap strengthened by 26,94%.
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Values on the exchanges were mostly weighted on Delta and Econet for ZSE and African Sun and Innscor for VFEX. ART Holding led the gainers on the ZSE, adding 111,11% value with shares worth over USD 800 exchanging hands over the month. Meikles was the biggest loser for the month letting go -66,22% of its value followed by Tanganda at -42,31% and Dairibord Holdings (-41,03%), Seed Co (-36,03%) and Ariston (-31,03%).
