By the close of trade in 2020, the Zimbabwe Stock Exchange (ZSE) All Share Index was up 1 045.84% to 2 636.34 which marks the biggest single-year climb for the local exchange in a decade.
Last year’s gains were helped along by high inflation, undervalued stocks and the continued decline of the local currency.
The Top 10 Index was the poorest performer posting a 724.68% increase to close at a record high of 1 671.47. Leading the way was the Middle Cap Index which was up 1 808.02% to close at 5 491.09 which is it’s highest ever climb. In terms of value, the ZSE’s market capitalisation closed the year up by 968% to post ZWL$317 billion up from the ZWL$29 million that was registered in 2019.
All of this means that the equities market which closed of 2019 (when the official rate was ZWL$16.77) with a value of US$1.77 billion grew by 115.5% to US$3.88 billion going by the official auction rate of ZWL$81.78.
This marks the biggest market capitalisation advance (968%) since the 104% that was recorded in 2018. However, according to a report by Business Weekly, some analysts say that the 2017-18 valuations were not accurate because of the 1:1 rate that was maintained by the financial authorities.
Who were the biggest movers on the ZSE in 2020?
CBZ overtook Delta as he most valued company listed on the ZSE with a market capitalisation of ZWL$58.4 billion. Masimba came in second with a 6 533 per cent gain and were ahead of heavy hitters like Hippo (4 950%), Cafca (4 525%) and Art (3 291%).
2020 was not all smooth sailing
Old Mutual was the biggest talking point in the market this year. Midway through last year, trading was stopped because the group was alleged to have been manipulating the exchange rate through the, now infamous, OMIR (Old Mutual Implied Rate).
While the “official rate” was at ZWL$25 for one US$, the OMIR and the parallel rate surged to ZWL$120. This, of course, ruffled the authorities and Old Mutual was delisted when trading resumed on the 3rd of August 2020.
Foreign investment also suffered a blow in 2020 as they were net sellers of shares amounting to ZWL$6 billion. This is because they had grown frustrated with not being able to repatriate dividens and diventsments. They, according to the same report by Business Weekly, took advantage of the Forex Auction as a means of repatriating divestments.