[2008-03-05]  Blue chips hit record levels
ZIMBABWE Stock Exchange stock indices rallied yesterday with some blue chips hitting record price levels thanks to a long position on the money market

The money market reported a surplus of $440 trillion with some dealers not quoting for 7-14 days as the central bank seeks to raise money for Government projects.

Another basic reason for the rally is the weak inflation outlook owing largely to the growth in money supply.

At the close of trades, the industrial index slightly laced with profit taking was estimated to have closed 8 percent higher at 7 932 321 803,73 points.

The minings index rose 16,07 percent to 6 266 327 210,58 points on the back of gains in Falgold, RioZim and Hwange.

On Monday, the main index rocketed 31 percent, and the mining was up 20 percent, as excess capital in the market continued finding its way on the stock market.

On a year-to-date basis, industrials have gained more than 215 percent and minings are up 94,61 percent versus January monthly inflation of 120 percent.

Heavyweights PPC gained $50 million or 55 percent to $140 million and Old Mutual rose $5 million to $70 million in line with the firming US dollar rate.

KMAL was $5 million ahead to $40 million and Delta put on $500 000 to $9,5 million.

ZPI led the risers after gaining $350 000 (or 175 percent) to $550 000, Zimnat put on $400 000 or 100 percent to $800 000 as did Red Star up $100 000 or 100 percent to $200 000.

Fidelity Life, which reports its December finals today, was $80 000 ahead to $300 000 and Barclays, which also reports its finals was $390 000 to $2 million.

CFI after a 5 for 1 share consolidation was steady at $1,9 million. The group said that it had achieved a satisfactory result in the 4 months to January although volumes had been low in its poultry division as a result of grain shortages.

Ariston put on $100 000 to $550 000 after saying that its operations were threatened by the group’s failure to access foreign currency in the FCA from the central bank despite numerous representations. The horticultural company however said that it fruit and vegetable business was generating healthy cash flows

Afre, formerly FML was $1 million ahead to $4 million after its rebranding. The group says that it would move away from service products and were considering two companies for acquisition in the long term.

Zeco was $70 000 ahead at $500 000 with a special deal of 25,2 million shares going through at $1,5 million. The engineering company with a market cap of $2 021 trillion is reportedly buying an electrical engineering company, Roly Cobert. It has now risen 1 625 percent since its listing.

Equity analysts have remained upbeat over the stock market outlook in the short-term. Stocks growth will largely be underpinned by weak interest rates.

"The stock market is expected to remain firm for the greater part of this week," said an analyst with Interfin Research.

"Inter market analysis shows that a rising OMIR concurs with rising or bullish prices on other counters while declining money market rates propel stock prices. This relationship is clearly the situation on the ground.

"The implication is that equities will continue to put up significant gains during the week. Our strategy for the week is to hold and restrain the supply side of equities. This should help investors bargain from more aggressive bids that are likely to push the market upwards."




Source: (C)copyright 2008 The Herald ltd.