Losses in Cassava Smartech and Econet Wireless following results which fell below expectations saw the stock market slide further into negative territory at the start of July trades.
This comes as Finance Minister Mthuli Ncube said that the rise in interest rates to above 50% was a temporary measure meant to close the taps on corporates who were borrowing cheaply to buy foreign currency on the streets. He, however, added that the increase was also necessary in order to match with inflation although the new rates were still negative.
Cassava fell as much as 12% and Econet by 7.48% in the wake of their February results. Econet reported a 27.59% drop in earnings per share to 4.2c with a PER of 43.7x. Profit from continuing operations was down 81.6% to $11.36 million. Debentures converted at 1:1 and were trading at $6.3 on the interbank and are on the balance sheet as RTGS but because SI 33 of 2019 makes an exception for assets held by foreign shareholders including Econet Global the USD held by such parties is not affected. Subscribers 11.4 million, data subscribers 10.8, Voice traffic up 37% and SMS traffic up 57%. The board did not declare a fourth-quarter dividend.
Cassava revenue was up 94.4% to $501.09 million while EPS was up 48% to 4c in its maiden results. Cassava was the worst performer among the heavyweights losing 24.2c to 173.45c, Econet fell 13.73c to 169.77c and Delta lost 5.99% or 20.37c to 319.75c. Old Mutual shed 5.08% to 1305.14c reducing its arbitrage profit to 19.1% although under the 90 vesting period.
Though the market was expected to remain in the doldrums, the impact of the fall of the two big caps saw the ZSE All-Share Index drop 5.17% to below the 200 mark at 194.17. The Top Ten Index was fell 6.82% to 183.77 while the Industrials Index lost 5.23% to 647.79. The Minings Index was unchanged at 255.26.
Market cap closed at $25,615,163,439 and turnover was $3,615,182.56. Foreign Buys were at $302,042.00 and Foreign Sales at $3,100. Total trades amounted to 123
Turnall led the fallers losing 17.27% or 1.90c to 9.10c but still has a year to date gain of 81.27%. TSL was down 16.67% or 10c to 50c and is down 17.01c in the year in the wake of its results where the group reported a 29% increase in revenue to $36.78 million.
Powerspeed and FML were the only gainers after they put on 20% and 14.29% to 30c and 24c respectively.–http://zimtechreview.co.zw