It was zero sum yet again in the capital markets as bond trading slumped whilst equities trades bounced back. Despite the weaker corporate bond trading, equities could only manage 19% slice of overall capital market sales during the penultimate week of August 2019.
Equity Market Update
In the week ended 23rd August 2019, a total of 624,718 shares were transacted in 73 trades, yielding a market turnover of K3,949,862. Trading activity was recorded in AIRTEL, CEC ZAMBIA, PUMA, STANDARD CHARTERED BANK, ZAMBEEF, ZANACO, ZAMBIAN BREWERIES and ZCCM IH. The LuSE All Share Index (LASI) closed at 4,457.88 points. The market closed on a capitalization of K57,361,417,482 including Shoprite Holdings and K23,122,211,502 excluding Shoprite Holdings.
Bond Market Update
During the week, bonds of total face value of K33,867,000 were transacted in 18 trades, yielding a market value sales of K16,803,000. Despite the increase in trades, the corporate bond market sales slumped by 17% according to Financial analytics Zambia (PoweredByFaZ.com).
Weekly Stock Market Diary
Monday 19th
The week opened with 18 trades being recorded on the day and 16,300 shares being transacted, resulting in a market turnover of K27,286. A share price loss of K0.52 was recorded in Zambeef. Trading activity was also recorded in CEC Zambia, PUMA, Zambian Breweries and CEC Africa on the quoted tier. The LuSE All Share Index (LASI) closed at 4,465.60 points down by 0.84% from its previous close of 4,503.18 points. The market closed on a capitalization of K57,393,497,700 including Shoprite Holdings and K23,154,291,720 excluding Shoprite Holdings.
Tuesday 20th
In 12 trades recorded on the day, 9,823 shares were transacted, resulting in a market turnover K16, 738. Shares price losses of K0.99 and K0.01 was recorded in AEL Zambia and Copperbelt Energy Corporation. Trading activity was also recorded Lafarge and Zambeef. The LuSE All Share Index (LASI) closed at 5,740.17 points down by 0.15% from its previous close of 5,740.17 points. The market closed on a capitalization of K62,694,690,507 including Shoprite Holdings and K28,455,484,527 excluding Shoprite Holdings.
Wednesday 21st
In 25 trades recorded on the day, 478,855 shares were transacted, resulting in a market turnover of K3,706,617. A share price loss of K0.01 was recorded CEC. Trading activity was also recorded in Airtel Zambia, Standard Chartered Bank, Zambian Breweries, ZCCM and ZANACO Bank. The LuSE All Share Index (LASI) closed at 4,461.79 points down by 0.09% from its previous close of 4,465.70. The market closed on a capitalization of K57,377,667,488 including Shoprite Holdings and K23,138,461,508 excluding Shoprite Holdings.
Thursday 22nd
In 24 trades recorded on the day, 126,883 shares were transacted, resulting in a market turnover of K209,090. A share price gain of K0.01 was recorded in Standard Chartered Bank Limited while Copperbelt Energy Corporation recorded a loss of K0.01. Trading activity was also recorded in PUMA, Zambeef and Zanaco. The LuSE All Share Index (LASI) closed at 4,465.70 points. The market closed on a capitalization of K57,393,917,494 including Shoprite Holdings and K23,154,711,514 excluding Shoprite Holdings.
Friday 23rd
In the final day of trading during the week, 3 trades were recorded and 60 shares were transacted, resulting in a market turnover of K480. Trading activity was recorded in Zambia Breweries. The LuSE All Share Index (LASI) maintained its previous close of 4,461.79 points as there were no share price changes. The market remained on a capitalization of K57,377,667,488 including Shoprite Holdings and K23,138,461,508 excluding Shoprite Holdings.
The closing share prices of the traded securities is illustrated in the chart below.
Corporate Bond Market continues to dominate, but…
The corporate bond market continued to dominate the Zambian capital markets in week 4, a phenomenon that often does not surprise local analysts. However, during the week, bond sales were 17% weaker than the previous week despite an increase from 14 trades to 18. Equities on the other hand bounced back with turnover increasing by over 1800% from the previous week.
Zambrew was the highest traded security by volume and turnover during the week. Standard Chartered came in a distant second. This was the first and only time in August that the beverage company’s security had been traded during the month. Interestingly, the security had the highest PE ratio of all the traded securities during the week.
With only one week of trading remaining, August is shaping up to be weaker for capital markets trading when compared to the July 2019 performance. Tightened liquidity and reduced participation by off shore investors are some of the reasons why performance has been poor.
Important Announcements
BAT Zambia signals weaker half year earnings
In accordance with the Lusaka Securities Exchange (“LuSE”) Listings Requirements, the Board of Directors of British American Tobacco Zambia PLC (“BATZ” or “the Company”) hereby advises the Shareholders of the Company that the earnings per share and headline earnings per share for the half-year ended 30 June 2019 are expected to be approximately 90% lower than that for the half-year ended 30 June 2018.
Zambian Breweries records softer half year performance
The half-year to 30th June 2019 was characterised by a difficult trading conditions as liquidity on the market tightened. Reduced liquidity on the market led to decreased disposable income which stifled growth in some of our beer categories.