In the shortest trading week of April, the stock market recorded its best performance of the month with turnover and shares traded increasing by 2009% and 2546% from the previous lackluster week. However, it was also a week that saw one day of no trading.
Equity Market Activity – Spotlight Holy Thursday
“In 27 trades recorded today, 378,399 shares were transacted, yielding a market in turnover of K495,068. A share price gain of K0.01 was recorded in PUMA while Standard Chartered Bank and Zanaco recorded a loss of K0.01 each“, according to the Lusaka Securities Exchange. “The LuSE All Share Index (LASI) closed at 5,491.65 points down by 0.11% from its previous close of 5,497.93 points. The market closed on a capitalization of K61,661,011,820 including Shoprite Holdings and K27,421,805,840 excluding Shoprite Holdings”.
Weekly Stock Market Diary
Monday 15th
- Week 3 of March opened with 8 trades recorded on the day
- 7,582 shares were transacted, yielding a market turnover of K9,297.
- Trading activity was recorded in CEC Zambia and PUMA Plc.
- The LuSE All Share Index (LASI) maintained its previous close of 5,497.93 points as there were no share price movements.
- The market remained on a capitalization of K61,68 billion including Shoprite Holdings and K27,44 billion excluding Shoprite Holdings.
Tuesday 16th
- 16 trades were recorded on the day
- 385,893 shares were transacted, yielding a market turnover of K493,186.
- Trading activity was recorded in CEC Zambia, PUMA Plc, Standard Chartered Bank, Zanaco Bank and CEC Africa on the quoted tier.
- The LuSE All Share Index (LASI) maintained its previous close of 5,497.93 points as there were no share price movements.
- The market remained on a capitalization of K61,687,119,121 including Shoprite Holdings and K27,447,913,141 excluding Shoprite Holdings.
Wednesday 17th
No Trades recorded on the LuSE
Thursday 18th
- Trading week closed with 27 trades being recorded on the day,
- 378,399 shares were transacted, yielding a market in turnover of K495,068.
- A share price gain of K0.01 was recorded in PUMA while Standard Chartered Bank and Zanaco recorded a loss of K0.01 each.
- The LuSE All Share Index (LASI) closed at 5,491.65 points down by 0.11% from its previous close of 5,497.93 points.
- The market closed on a capitalization of K61,661,011,820 including Shoprite Holdings and K27,421,805,840 excluding Shoprite Holdings.
Financial Insight Weekly Analysis – One Ngwee Makes a Difference!
Despite only 3 days of active trading on the LuSE, the local exchange rebounded from Week Two’s dismal performance which showed the number of trades reducing signalling a weak month of trading.
PUMA security recorded a share price gain of K0.01 while Standard Chartered bank and Zanaco securities saw an equivalent amount reduction in their share prices.
In a bizarre turn of events, what appeared as a slow start to week 3 saw Tuesday and Thursday recorded high turnover in 43 trades. Sadly however, Wednesday recorded no action on the exchange which had little impact on overall weekly performance as the LuSe recorded its highest performance in both turnover and volumes of trade for the month.
On Thursday, Standard Chartered and Zanaco dominated trades recording the highest volume and turnover to close the shortest trading week of April. The offer prices and number of shares on offer were too good for buyers pass by without giving sellers an offer they could not refuse hence the reduction in share price.
Interestingly, PUMA was among the most popular securities during the week. The security was traded on all days when the exchange had transactions recorded. Demand for the security led to an increase in the share price.
Rational investors will recall that the company recorded a 112% increase in profit after tax of K115.13 million with volumes of product sold being 5.2% higher than the previous year. However, despite the improved performance, the company, in their SENS announcement on 7 March 2019, cited liquidity challenges caused by substantial sums of receivables, whose timing of realisation was uncertain leading the board not to declare a financial dividend. Curiously, current assets in the abridged financials increased by 23.4%.
The Puma security opened the year outperforming the LuSE All Share Index until Feb 7 when the share price fell to K0.99. However, with the all share index losing some ground and Puma has now edge up over the index with the recent K0.01 share price increase.
With a price to book value ratio now at 0.82, earnings per share at 0.23 and dividend yield of 2.04, the security is attractive for an industry whose product pricing moves with global movement of macro factors such as oil price and exchange rate.
Important Announcements
BAT Earnings
Board of Directors of British American Tobacco Zambia PLC advised Shareholders of the Company that the Earnings per Share and Headline Earnings Per Share for the financial year ended 31 December 2018 are expected to be approximately 150% higher than that for the financial year ended 31 December 2017.
The movement in profitability is attributed to an increase in turnover which was largely driven by a general volume increase across the portfolio of over 67%. The increase in volumes sold was on the back drop of the Company being able to compete favourably on price following the commencement of local production at the back end of 2017