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[2008-04-28] Good times continue to roll on equities market
EQUITIES finished last week in positive territory as investors snapped shares from the heavyweights to penny stocks leading the index to record levels as it burst through the 70 billion point level.
The industrial index rose 28,84 percent while on the week it recorded a 126,30 percent jump to 71 928 862 486,21 points.
The mining index rallied 58,9 percent to 49 338 140 671,94 points. It had a weekly gain of 110,17 percent.
Notable gains were recorded in Bindura up $80 million to $200 million and RioZim, which rose $150 million to $550 million.
The cliches on what is happening at the stock market are always the same nowadays either analysts are hyping about the sea of green or they are telling investors to keep on putting the "dosh" as everything is happening for the market.
There seems to be some kind of investor revolution currently taking place though, where everyone has suddenly realised that there is money to be made in equities.
Of course, the stock market mania has attracted the lower to middle-income earners who will curse the market once they lose out for the first time when the bubble bursts.
Economic fundamentals (good or bad) appear to be in favour of a rally and there’s no reason why investors should rethink.
The chief rise in the stock market is Government expenditure (inclusive of the need for the "critical" foreign currency to keep Zesa and Zinwa going) and low interest rates prevailing on the money market.
These will continue to feed into the frenzy because apparently the cure is more dangerous than the disease itself.
Last week it closed with a market value of $0,876 quintillion ($876,7 quadrillion) and a year to date gain of close to 4 000 percent.
Interestingly values larger than a quadrillion are almost never used.
I stand corrected, but the highest value ever used is a trillion although in wartime Hungary the 100 Million B-Pengo, issued in 1946 would be the highest because it translated to 100 000 000 000 000 000 000 Pengo. It was worth about US$1 and would read 100 sextillion.
Foreign investor inflows are pretty high at the moment, maybe endorsing biblical Joseph’s theory in reverse of the fat years following the lean years.
The media’s favourite is LonZim via Celsys, then RenCap through CBZ and the Old Mutual route whose shares in issue keep increasing (more of this in the next issue).
With the way things are, some stocks are likely to have a billion-dollar share price within a couple of days (if not today).
PPC closed the week up $265 million at $865 million, Old Mutual rising $100 million to $550 million and Econet up $145 million to $510 million.
In nominal value that is a lot of money but in reality it is what farm workers (who also face the prospect of paying taxes for the first time) are demanding as minimum wage and only enough for two weeks’ commuter fare.
At current capitalisation, KMAL leads with $109,04 quadrillion, which can buy Cairns at $810 trillion plus a whole lot of other companies on the exchange. KMAL closed last week with a gain of $130 million to $450 million.
Not that those companies are bad companies. Cairns is actually one of the few that has maintained reasonable capacities in light of the "challenges" being faced by business and remains undervalued on the ZSE at $5 million .
It kind of takes us back to last year when even if companies had started to make the previous year’s profits in one month all that came to nought because of the second half price rollbacks.
Zimnat said performance in the first quarter was almost five times ahead of last year’s bottomline profits.
Attributable profit was $70 trillion against $15 trillion for the full year to December, an increase of 466 percent. The insurer closed with a $900 000 rise to $2,5 million.
Red Star led the risers on Friday with a $600 000 (or 150 percent) gain to $1 million although the retail sector is still struggling in terms of restocking.
CAPS was the only counter in the red on Friday after it dropped $300 000 to $1 million.
Source: the Herald
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