The month of November was characterized by increased activity on the Zimbabwe Stock Exchange on account of growing liquidity in the market. Market capitalisation saw a 22% uplift in nominal terms to ZWL$14.64tn supported by a 17% increase in the Top 10 index. In real terms, the exchange gained a marginal 0.59% m-o-m to a market capitalization of US$1.59bn.
Total volumes traded grew 141% m-o-m to 162.68mn shares as OK Zimbabwe, Econet, and Star Africa led trading with 73.92mn, 24.61mn, and 15.75mn shares, respectively. Average daily value traded on the bourse increased from US$0.2mn to US$0.3mn within the month.
Relative to historical averages, the exchange remains undervalued providing for buying opportunities. We continue to observe a dislocation between fundamentals and performance of the bourse. Cycles on the exchange have primarily been fuelled by money supply dynamics. A sustained tight monetary policy coupled with currency volatility have largely curtailed real capital gains on the exchange within the year. Forward-looking, the uncertainty around money supply developments in 2023 propels us to lean more towards defensive stocks that have strong dividend policies in case capital gains remain subdued.
