ZSE Weekly Commentary

The ZSE sustained gains in the third week of the month, which typically would see sell-offs induced by profit-taking. The posi�ve trajectory is driven by hieghtened safe-haven seeking which pushed up stock prices by an overall average of 18.02%. The All Share Index closed at a new all-�me high of 93115.78 points, scaling up the month-to-date return to 124.96% in nominal terms, which is the highest monthly ou�urn in over 3-years so far. On a year-to-date basis, the ZSE closed the week at a nominal return of 377.67%, which translates to 73% in US$ terms as of Wednesday. However, as of Tuesday, the ZSE boasted of a US$ year-to-date return of 120%. This was trimmed to 73% following a huge jump in the exchange rate deprecia�on against the US$ on the Willing-buyer Willing-seller on Wednesday, from ZWL1,449 to ZWL1,888. On the upside, the ZSE remains the best performing bourse in Africa on a year-to-date return basis, in US$ terms. Based on the parallel market, the ZSE is up 59% in US$ terms, which is, however, below Malawi's 65% growth.

On the US$ denominated bourse, VFEX, the All Share Index halted the posi�ve trajectory that stretched from early month as the appe�te for regulated US$ markets slowed-down. The bourse eased by -0.61% to close at 83.44 points, extending year-to-date losses to -12%. Losses were driven by 4 laggards which outweighed 3 risers. An aggregate of US$897,099 exchanged hands on VFEX in the week under review, up from US$332,067 traded in the prior week. Meanwhile, First Capital Bank debu�ed on VFEX in the week under review a�er migra�ng from ZSE, and recorded a decline of -16.5% in its first week to close at US$0.0334 per share.

Despite the gaze�ng of blended infla�on as the official infla�on sta�s�c in the country, specula�ons and indica�ons of a runaway ZWL infla�on have triggered demand for safe haven in hard currencies and ZWL denominated assets. This has seen the ZWL exchange rate premium between the formal and informal currency market surpass 100%. The ZWL depreciated by -25.59% against the US$ on both the Interbank and the Reuters Auc�on market respec�vely to close at ZWL1888.0119 per US$ in the week under review.