Weekly Capital Markets Report (2nd to 6th September 2019)
Economy, Opinion

September opened to the dominance of the corporate bond market which saw it take up 95% of all the sales recorded in the local capital markets.

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Equity Markets Summary

In the week ended 6th September 2019, a total of 307,650 shares were transacted in 74 trades, yielding a market turnover of K1,087,617. Trading activity was recorded in CEC Zambia, Standard Chartered Bank, ZCCM IH and Zambia Sugar. The LuSE All Share Index (LASI) closed at 4,426.25 points. The market closed on a capitalization of K57,229,857,997 including Shoprite Holdings and  K22,990,652,017 excluding Shoprite Holdings.

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Bond Markets Summary

During the week, bonds of total face value of K36,348,000 were transacted in 22 trades, yielding a market value sales of K20,612,000. The bond market opened slightly weaker signally continued liquidity frustration in the market.

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Insights

Week one of September 2019 went on record as being the second-best opening trading week in a month after week one of January (K 1,5 m turnover) with over K 1million in turnover and over 307 thousand shares being traded.

Only six companies had securities traded with a total of 74 trades being recorded on the equities market. Ironically, CEC Zambia had the lion’s share of the number of trades despite yielding a lowly turnover. AEL Zambia, Standard Chartered and Zambian Breweries securities dominated trading.

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Of the traded securities, AEL Zambia and ZCCM IH were the priciest at K20 and K28.49 respectively. Despite the pricing point, the two securities currently provide investors a good return on investment with a low PE ratio signally undervaluation. Zambian Breweries share price on the other had the highest Price to Earnings ratio signaling an overvalued security.

On the corporate bond market side, the number of trades in the opening week of September remained on par with the closing week of August. However, there was a 40% slump in sales in the comparative weeks as the bond market started on a sluggish note. The highest traded bond was the 15 Year which is currently yielding 14%.

Important Announcements

Appointment of chief financial officer and non-executive director

Pursuant to section 3.59 of the LuSE Listing Requirements, the Board of Directors of Zambeef Products PLC wishes to announce the appointment of Michael Mundashi as an Independent Non-Executive Director and Faith Mukutu as Chief Financial Officer and Executive Director, with immediate effect.

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