Mixed Performance Expected for Zimbabwe Agro-Stocks: Zimbabwe agriculture sector is forecasted to register another good year on the back of forecasted above normal rainfall. However, high fertilizer and fuel prices continue to pose a downside risk to the sector. Commodity prices are softening and this will have a negative impact on agricultural exports. On the other hand, declining agriculture commodity prices translate to increased margins for agro-processing companies with inelastic demand. As a result, we expect a mixed performance for agro-stocks on the two local stock exchanges. Looking at agro-stocks combined, the subcategory is trading at a discount compared to regional peers. On the ZSE, Zimbabwe agro- stocks are trading at an average P/E(+1) of 3.75x compared to peers at 16.83x and EV/EBITDA(+1) of 2.64x compared to peers at 8.64x which presents BUY opportunities.
