The dominance of the corporate bond market is being weakened by the force of government bonds and tightened liquidity. Investors are seeking out higher-yielding assets. However, the equities market also showed a rebound as securities trading surged.
Equity Markets Summary
In the week ended 11th October 2019, a total of 1,403,298 shares were transacted in 123 trades, yielding a market turnover of K3,270,490. Trading activity was recorded in CEC Zambia, PUMA, STANDARD CHARTERED BANK, ZAMBIAN BREWERIES, ZAMBEEF, ZANACO and CEC AFFRICA on quoted tier.
This represented a 1536% surge in equities trading backed by a 483% increase in trading volume. This is the highest surge in equities appetite on a week by week basis since July 2019.
The LuSE All Share Index (LASI) closed at 4,373.45 points. The market closed on a capitalization of K57,008,702,671 including Shoprite Holdings and K22,769,496,691 excluding Shoprite Holdings.
Bond Markets Summary
During the week, corporate bonds of total face value of K14,375,000 were transacted in 9 trades, yielding a market value sales of K9,423,000. This represented a 52% decrease in sales from the opening week. Trade numbers also fell by 66% signaling weak appetite from investors for corporate fixed income. The reason for this is that investors of fixed income are seeking out higher-yielding government bonds in preference over corporate bonds.
Perspective
The attraction for Governments is evident as more investors sought out Government Paper over Corporate paper (bonds). Week 2 of October saw the dominance of the corporate bond market weaken as equities trading surged in as many weeks.
Week 2 saw Zambrew dominate equities trading as it had the lions share of turnover and trade volume. However, the beer maker’s securities were the most expensive of the week trading at K7.99. With a high Price to Earnings ratio, the stock remains overpriced for the amount investors spent on the security.
Important Announcements
Harry exits as CFO of Investrust Bank
“In accordance with Section 3.59 of the Lusaka Securities Exchange Listing Rules, the Board of Directors of Investrust Bank Plc (“the Board”) wishes to announce the departure of Mr. Harry Mafuta as Chief Financial Officer of the Company effective 10th October 2019.”
Cavmont Capital to host Shareholders at 21st AGM
“NOTICE IS HEREBY GIVEN that the 21st Annual General Meeting (AGM) of Cavmont Capital Holdings Zambia Plc will be held at the Radisson Blu Hotel, Lusaka on Tuesday, 5th November 2019 at 14:00 to 15:00.”