trillion by mid-week, thus resulting in firming interest rates and a resultant shoddy performance by the stock market. However as the week came to a close the money market position was beginning to thaw out, albeit remaining short of $5 trillion.
This week close to $6 trillion in maturities are expected. This could result in the market squaring off and interest rates falling thus possibly brining some life to the stock market that has since become a “graveyard market”.
As the month of May approaches, in which a clear policy will have to be made on the massive maturities expected in that month, some investors have already begun accumulating shares in anticipation of a bull run.
Some $24 trillion and $36 trillion maturities are expected in the months of May and June this year and this could trigger a bull run on the stock market if they are not dealt with decisively. If the instruments are not rolled over to long dated paper or further mopped up at an attractive rate (further deferring and magnifying the problem to August) the money market could be awash with cash.
Our recommendation is for investors to continue to accumulate into cash rich stocks with February/March interims/year-ends, while buying into weakness on companies that had strong December results.
The local currency remained “pegged” at Z$99201.58 as the volumes traded on each of the five days failed to reach the US$ 5 million threshold. The Greenback extended gains in Asian trade on speculation that Japanese investors will become more aggressive in buying overseas bonds and assets with the start of the new financial year from April 1.
Majors mid rates: GBP/USD 1.72; EUR/USD 1.20; USD/ZAR 6.15; USD/JPY 118.52.
In Industrials the top gain of the week was NICOZ, which gained 80% to close the week at $900. TRUWORTHS recovered from the previous week’s losses and put on 47% to $5500.
FINHOLD also rebounded and put on 44% to $23000 on the back of good results. Other top gains were WILLDALE, FIDELITY and OK. The top losses of the week were led by APEX, which shed 25% to $1200.
REDSTAR retreated 23% to $2000, while FBCH eased 18% to $4100. PIONEER, which continues to publish stale cautionary announcements, slipped 18% to $700. The company is yet to announce its December results and has now gained a top status as a laggard when it comes to reporting its results within the stipulated timeframe.
Minings traded weaker, pulled down by losses in HWANGE and BINDURA. The former announced some lukewarm results during the week while the latter published uninspiring results in the week under review. The performance was pulled down by a $175 billion interest charge.
The company closed the year on a debt position of $152 billion, which was funded by overdraft and Banker’s Acceptances. BINDURA plummeted 54% to $13,000 in response to the poor performance.
HARARE - The stock market traded flat over the week, as movements remained sideways. Investors who have been in limbo over the past weeks on unclear monetary policies continued to trade cautiously.
The money market position continued to deteriorate over the week with the deficit reaching $7.8