It surely has been long since the last Bullish Thoughts column… A lot has just been happening! Record levels of foreign investor participation on the ZSE in January 2013, hard run by blue chips among many trends.
Delta saw trades worth $14.1m, Econet Wireless $11.6m & Innscor $2.6m. On foreign trades, Delta was bought $11.8m & sold $1.8m, Econet Wireless was bought $8.3m & sold $1.2m, Innscor was bought $1.8m & sold $0.6m. CBZ was the counter seeing the biggest exit by foreigners at $2.7m against purchases of $0.8m.
Bindura was the biggest riser in January 2013 adding 107% with company reporting a 152% rise in JORC certified reserves. Unfortunately for Mwana shareholders, there was an accident at Freda Rebecca this past week which will affect gold production at the mine and the shares has since gone south.
Other top risers in January included Art (67%) which is in a fundraising drive and Afre (57%) which recently concluded a fully funded rights offer exercise.
Perhaps the riser of interest was Meikles Africa which was up 53% in January following reports of potential partnership with ZMDC to mine diamonds in the Manicaland area.
One would be tempted to think that Meikles probably was aware of some diamond deposits on its estates and judging by the rate of exploration activity in the region, it was only a matter of time before anyone could come across the “stake”.
Rock & Hard place…
Coming back to the market, there seems to be consensus that the bull has run and run really hard. Some share prices are already under pressure from profit takers especially Innscor already down to 92c from an all time high of 104c.
Delta share is also under immense pressure holding at the moment around 124c with Econet being the only one defying the financial gravity that has gripped the market currently with the counter now at 650c against an average consensus price of 680c.
So an investor is faced with these two scenarios: “ The shares are fully valued hence no upside and interest rates are coming down” with the latter being really a function of state intervention.
Where does an investor put money in this case. Interest rates at fairly stable banks are in the region of 5% p.a. and at the risky banks it is around 12% and weakening.
Where does one put money when faced with a scenario like this one? Property market is also not looking too good with voids being the order of the day in CBD offices.
Unless one has retail subsector property stock, the deal may end up tasting sour later on especially considering that property is typically very long term investment.
Bullish Thoughts waits for your feedback on where you think we can make the money this year.
Tobacco Selling Season: Let the bling bling begin…
Most people will remember the 2009/2010/2011 picture/image of tobacco farmers with flat screen TVs & satellite dishes boarding the flatbed Nissan UD trucks back to the farming regions of Karoi, Magunje and the like.
That was the bling brought about by tobacco farmers as prices shot through the roof (and output rose in some of the cases).
That resulted in an unprecedented increase in tobacco farming by Zimbabweans. Now 2013 tobacco selling season is here having opened on Wednesday with the highest quality golden leaves on auction fetching $4.70/kg against $4.45/kg on the same period last year.
Bullish Thoughts can only say the bling is on considering that tobacco fetched circa $517m last season. Unfortunately most of that money may never find its way back to the ZSE but perhaps TSL may stand to benefit especially if the share on opening day can be maintained!
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