Stocks generally positive despite macroeconomic challenges

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Harare - The months of October and September saw some Southern African countries recording positive returns on the stock market in the face of the macro-economic and geopolitical challenges.

The Malawi Stock Exchange market registered a positive monthly return on index of 2.70percent(2.70percent in US$ terms), 4.70percent YTD in the month of October. It also registered an increase in total volume of shares traded despite registering a decrease in total value traded.

The market transacted a total of 185,453,439 shares at a total consideration of MK2,495,407,311.96 (US$3,404,409.97) in 243 trades. In September 2019, the market transacted a total of 154,699,117 shares at a total consideration of MK3,706,719,389.44 (US$5,056,967.00) in 246 trades. This reflects a 19.88 percent increase in terms of share volume traded and a 32.68percent (32.68 percent in US dollar terms) decrease in share value traded.

Of the total volume of shares traded 114,536,779 NBS shares traded as negotiated deals. Daily average share trades exhibited similar trends where the market registered an average daily volume of 8,831,116 shares compared to 7,366,625 shares traded in September 2019.

Botswana’s Domestic Company Index (DCI) improved significantly in the period 1 January to 30 September 2019 compared to the same period in 2018, with a depreciation of 5.0percent compared to a depreciation of 11.5percent during the same period in 2018.

According to the Botswana Stock Exchange (BSE), a significant increase was registered with respect to foreign institutional investors whose trading activity in the period under review increased from 35.5percent to 42.4percent. The value of ETF units decreased during the period under review to P180.1 million compared to P216.2 million in the corresponding period in 2018, and the number of units traded similarly reduced to 1.3 million units in 2019 compared to 2.4 million units in 2018. Notwithstanding, ETFs have performed very well in terms of the returns in 2019 relative to 2018, and well ahead of the equity market. During the year to September 2019, local companies contributed 52.3 percent to total turnover compared to 57.1 percent in the corresponding period in 2018. Further, local individuals contributed 4.2 percent of total turnover recorded during the period 1 January to 30 September 2019 compared to 4.4 percent in the corresponding period in 2018.

 South African financials recorded a sound performance in September 2019. According to RisCura the sector index increased by 3.54 percent boosting the overall index into positive territory. Resources and industrials, on the other hand, struggled at -1.05 percent and -0.75 percent, respectively. Following the trend of previous months, retailers remained under pressure, and the logistic sector extended its dominance. South African assets struggled during September, with cash proving one of the better performing local investments.

Local equities had a low returns in the month, while international equities were generally higher, despite some worrying macroeconomic and geopolitical reports.

The Zimbabwe industrial index increased 329 points or 68.51 percent since the beginning of 2019, according to trading on a contract for difference (CFD) that tracks this benchmark index from Zimbabwe. Historically, the Zimbabwe Stock Exchange reached an all-time high of 810.27 in November of 2019.

Amidst macro-economic challenges, the market has been bullish over the month of October, nevertheless the beginning of November saw the mining sector stocks weigh down. Nickel miner Bindura and gold major RioZim dragged the index lower, both dropping immensely by 18 percent and 17 percent respectively.

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