Zimbabwe Stock Exchange Summary

The short trading week saw the industrial index trading largely unchanged, losing a marginal 1.01% to 161.97points whilst the mining index gained 3.13% to close at 161.35 points. Trade was relatively thin due to fewer special bargains compared to the previous week.  Volume traded thus amounted to 38.1m shares down from 137.4m shares, whilst the value traded fell by US$ 17.8m to US$ 3.8m.

The agro sector recovery is on track as 129.9m kgs of tobacco were auctioned at the country's three auction floors up 11% from the prior year. A total of 170m kgs had been targeted this year, but the production fell short due to a myriad of factors. At best players expect that mop up sales could take up total sales to 140.0m kgs. In terms of proceeds the tobacco sales totalled US$ 356.6m up 4% from the prior year. Maize and wheat production are also steadily improving.

We expect the improving agricultural sector production to support economic growth especially the manufacturing sector which draws most of the raw materials from the agricultural sector. We thus recommend investors buy into counters including AICO, Natfoods, SeedCo and Zimplow. Other buys include Delta, Innscor, Padenga, Pearl Properties, Mash and Turnall. In our view, the ZSE offers an opportunity to buy into high‐growth, dominant, well managed and strong cash generation companies.