- According to a public notice issued by the ZSE on June 7, 2023, trading was temporarily halted following the sharp rally in stock prices.
- For second consecutive day, investors flocked to the bourse searching safe haven as the Zimbabwean dollar tanks.
- The latest foreign currency auction held by the Reserve Bank of Zimbabwe the Zimbabwe dollar experienced a sharp drop, averaging ZWL3,673.7718 against the United States dollar.
The Zimbabwe Stock Exchange (ZSE) on June 7 announced a halt in trading for two consecutive days. The move comes amid investors flocking to the stock market as an escape from the rapid depreciation of the Zimbabwean dollar. The ZSE All Share index surpassed the 10 per cent threshold on the upside. Consequently, the ZSE exchange had to take immediate action.
According to a public notice issued by the ZSE on June 7, 2023, trading was temporarily halted at 12:10 PM (CAT), following the sharp rally in stock prices. “To allow for a cooling-off period, the market will remain closed for 30 minutes, with trading set to resume at 12:40 PM (CAT),” said Kudakwashe Mundowozi, acting Head of ZSE markets.
Zimbabwe Stock Exchange trading operations
This halt in trading comes on the heels of a similar announcement made by the ZSE on June 6, 2023, as detailed in a subsequent public notice. Once again, the ZSE had to suspend trading due to the significant surge in the ZSE All Share index, breaching the 10 per cent threshold.
As per the notice, the trading halt commenced at 12:10 PM (CAT), and after the required cooling-off period. Trading recommenced at 12:40 PM (CAT). The trading halts were made Pursuant to a ZSE public notice dated April 28, 2022 on changes to ZSE trading operations.
Notably, the ZSE had previously announced changes to its trading operations on 28th April 2022. The change would help the ZSE in adapting to evolving market conditions. One notable adjustment involved reducing circuit breakers for stocks trading above ZWL1 from ±20 per cent to ±15 per cent. Additionally, penny stocks, defined as stocks with a market price below ZWL1, saw their circuit breakers decrease from 100 per cent to 20 per cent.
Furthermore, the ZSE introduced a market-wide trading halt of 30 minutes in response to a ±10 per cent movement in the ZSE All Share index during a trading session.
Read also: Market volatility triggers change of circuit breakers in Zimbabwe’s ZSE
Zimbabwe Stock Exchange performance
The trading session on the Zimbabwe Stock Exchange (ZSE) on June 7, 2023, witnessed notable activity. A total of 6,619,400 shares changed hands. This corresponds to a market value of over ZWL 2 billion. Compared to the previous trading day on June 6, there was a 20 per cent increase in trading volume.
However, the turnover experienced a 50 per cent decline. The current market capitalization of the Zimbabwe Stock Exchange stands at an impressive ZWL 12 trillion.
Throughout the session, 31 equities listed on the ZSE participated in trading, resulting in 30 gainers and two losers. Among the gainers, ZB Financial Holdings led the way with a notable 15 per cent share price appreciation, closing at ZWL 555.45 per share.
NMBZ Holdings, British American Tobacco, and Delta Corporation also recorded significant gains of 15 per cent. On the other hand, CFI Holdings saw a decline of 10.25 per cent, while Ariston Holdings experienced a decrease of 5.64 per cent. Mashonaland Holdings emerged as the most actively traded stock, with a volume of 3.82 million shares.
EcoCash Holdings Zimbabwe, Zimre Holdings, and OK Zimbabwe also witnessed notable trading activity with volumes of 851,500, 345,600, and 282,200 shares, respectively.
Read also: Companies that declared US dollar dividends on the Zimbabwe Stock Exchange in 2022
ZSE market indices
Examining the performance of the ZSE market indices, the benchmark ZSE All Share Index (ZSE-ASI) displayed an impressive surge of 14,563.81 points, marking a 10.7 per cent increase and closing at 150,638.87.
This signifies a remarkable 39.23 per cent gain over the past week, a 153.79 per cent gain over the past four weeks, and an impressive year-to-date gain of 672.75 per cent.
Other notable indices that displayed positive performance include the ZSE Top 10 Index, which saw an 11.51 per cent increase over the day, translating to a 40.44 per cent gain over the week and a 651.71 per cent gain year-to-date.
The ZSE Top 15 Index also showcased strong performance, with an increase of 10.85 per cent for the day, a 40.47 per cent gain over the week, and a significant 704.18 per cent gain year-to-date.
Additionally, the ZSE Small Cap Index observed a modest increase of 2.24 per cent for the day, translating to a 0.75 per cent gain over the week and an impressive 128.44 per cent gain year-to-date. The ZSE Medium Cap Index experienced an 8 per cent increase during the session, resulting in a 35.41 per cent gain over the week and an outstanding 642.6 per cent gain year-to-date.
ZSE Consumer Discretionary Index
ZSE Staples Modified Index also witnessed notable gains, recording a 13.16 per cent increase for the day, representing a 51.64 per cent gain over the week and an astounding 809.09 per cent gain year-to-date.
The ZSE Consumer Discretionary Index also performed well, with a 13.16 per cent increase for the day, a 30.76 per cent gain over the week, and an impressive 747.95 per cent gain year-to-date.
These recent disruptions are a testament to the remarkable momentum in the Zimbabwean stock market. Idriven by investors seeking a secure investment option amidst the turbulent economic climate.
The ongoing depreciation of the Zimbabwean dollar has eroded confidence in traditional currency holdings, prompting individuals and institutions to turn to the stock market as a potential safeguard for their assets.
Zimbabwe foreign currency auction results
Amidst the ongoing volatility of the Zimbabwean dollar, the latest foreign currency auction held by the Reserve Bank of Zimbabwe (RBZ) witnessed a significant decline in the exchange rate. On June 6, 2023, the Zimbabwe dollar experienced a sharp drop, averaging ZWL3,673.7718 against the United States dollar. This represents a decrease of over ZWL1,000 compared to the previous auction held on May 30, 2023 where the exchange rate stood at ZWL2,577.0564 per US dollar.
The RBZ’s foreign currency auction allotted a total of US$4,987,432.34 in funds, marking a considerable decrease from the previous week’s allotment of US$15,266,095.92. Raw materials received the largest share of the allotment, followed by machinery and equipment.
The Small to Medium Enterprises Forex Auction saw a total allotment of US$829,418.77, down from the previous allocation of US$1,782,414.85. Similarly, the Main Forex Auction was allotted US$4,158,013.57, showing a significant decrease from the previous week’s allotment of US$13,483,681.07.
The auction represented a breakthrough for total of 298 bids from small businesses and 210 bids from large firms. However, it is worth noting that only 82 bids from small businesses and 38 bids from large firms received allocations from the auction.
The Highest Rate Received on the Small to Medium Enterprises Forex Auction was ZWL4,100.0000, while the Lowest Bid Rate Allotted was ZWL3,500.0000. On the Main Forex Auction, the Highest Rate Received was ZWL4,100.0000, and the Lowest Bid Rate Allotted was ZWL3,555.0000.
Read: Zimbabwe Stock Exchange outlook in the face of dollarization
