Stock market loses US$27m in a week

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by RBZ

Deposit rates: During the week ending October 2, average deposit rates for savings, one month and three-month tenors remained unchanged at 3%; 8,14% and 9,14% per annum respectively.

Lending rates: Weighted lending rates for individuals and corporate clients at commercial banks closed at 11,56% and 8,39% per annum respectively during the week under review.

Clearing and settlement activity
Transactions processed through the National Payment Systems (NPS) amounted to US$1 122,43 million, a 6% increase from the previous week. Transactions processed through the Real Time Gross Settlement (RTGS) system increased from US$882,92m in the previous week, to US$898,28m. In terms of proportions, RTGS payments accounted for 80,03% of the total value of transactions processed through the NPS, followed by mobile transactions, 10,03%; automated teller machines (ATMs), 6,52%; point of sale, 3,13% and cheque transactions, 0,29%.

Mobile-based transactions accounted for 89,16% of total transactions, in volume terms, followed by POS, 5,39%; ATMs, 4,63%; RTGS, 0,70%; and cheque, 0,13%.

International commodity prices
During the week under review, the international commodity prices for gold, platinum, copper and crude oil registered declines, while the price of nickel firmed.

Gold prices declined by 1% from a weekly average of US$1 135,94 per ounce in the previous week, to close at US$1 124,21/oz. The decline in gold prices was largely due to selling pressures by traders.

Platinum prices registered a 3,90% decline from US$950/oz to a weekly average of US$913/oz. This was attributable to a reduction in production of diesel automobiles, following reports that Volkswagen had altered diesel engines to artificially generate low emissions during testing. As a result, this raised environmental pollution concerns associated with diesel cars.

Copper prices continued on a downward trend declining by 1,5% to close at US$5 091,10 per tonne. The strengthening of the US dollar, coupled with faltering global demand, particularly in China, contributed to the downward pressure on copper prices.

Nickel prices registered a 3,10% increase from a weekly average of US$9 808/t to close at US$10 115/t. The decline in nickel prices was attributed to supply constraints, after Russia’s largest mining company announced plans to scale down production on account of attendant viability challenges.

Equity markets
The Zimbabwe Stock Exchange continued to experience bearish sentiment during the week as investors remained sceptical about the economic outlook of the country. Consequently, both the mining and industrial indices declined by 1,18 points and 0,98 points, from 25,15 points and 132,43 points to 23,97 points and 131,45 points, respectively.

The decline in the benchmark index was largely attributed to losses realised in African Sun (20,80%), Meikles (10,00%), PPC (9,09%), Art (8,33%), Fidelity (7,60%) and Edgars (7,20%). Poor performance in some heavily-capitalised counters such as Delta, Old Mutual, Padenga and Seed Co also weighed down the industrial index.

Bindura, which contributes more than 30% of the mining capitalisation, continued to weigh down the mining index as it registered a 10% decline in its share price.

Market turnover and volume: Subdued activity that characterised the bourse saw market turnover decrease by 35,72% from U$3,12m to US$2,01m during period under review. The volume of shares traded, however, increased by 32,39% to close the week under review at 23 490 669 shares.

Market capitalisation: As a consequence of negative trading on the ZSE and the losses recorded in some blue-chip counters, the market lost US$27,03m worth of capitalisation, from US$3,46bn to US$3,43bn during the week under review — RBZ Weekly Economic Highlights.