Despite corporate bond market sales slipping by 63% in week 3, the fixed income market dominated the capital markets by 92% compared to the equities market despite the over 2200% surge in turnover during the week.
Equity Market Update
In the week ended 15th November 2019, a total of 5,074,733 shares were transacted in 93 trades, yielding a market turnover of K37,797,017. Trading activity was recorded in AIRTEL, CEC ZAMBIA, CAVMONT CAPITAL HOLDINGS ZAMBIA, LAFARGE, STANDARD CHARTERED BANK LIMITED, ZAMBEEF, ZAMBREWERIES and ZAMSUGAR.
The LuSE All Share Index (LASI) closed at 4,296.29 points. The market closed on a capitalization of K56,687,711,032 including Shoprite Holdings and K22,448,505,052 excluding Shoprite Holdings.
Bond Market Update
During the week, bonds of total face value of K5,875,000 were transacted in 5 trades, yielding market value sales of K3,420,000. This was a reduction in sales by 63% compared to the previous week. The corporate bond market continued to slide from the close of October 2019.
Perspective
With the corporate bond market continuing to dominate the Zambian capital markets, it is clear that liquidity remains a big challenge for fixed income traders. Over the last couple of months, Financial Insight has observed that the sales of the Corporate bond market have been weakening as the year winds down to a close.
Conversely, the equities market has been characterized by surges in turnover in Week 3 of the trading month since October 2019. This is because large volume trades of a few selected companies occurring in those periods.
Of the traded securities during week 3, Airtel and Zambrew were the most expensive securities traded due to their high Price to Earnings Ratios. Zambrew had the most shares traded as well as recorded the highest turnover during the week. This surge in trades on Zambrew occurred on the final day of trading during the week.
Important Announcements
National Breweries reports 7% improved gross margin for 2019
Compared to the prior period total volume sold decreased by 20% due to a 33% price increase. However, the gross margin improved by 7% due to a favorable pack mix and prices increases.