Have the ZSE bulls run too far?

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In the last 2 weeks we have witnessed an exponential jump in prices of stocks on the Zimbabwe Stock Exchange (ZSE). We probably last witnessed such a run sometime in 2018. Using ZSE lingo, the market has been limiting up in the last couple of trading sessions. This means prices were moving up by the maximum allowable range per day – which is 20%. For some penny stocks, ZSE Trading rules allow them to shoot up or down by 100%. This means without these trading caps, the prices could have potentially gone up by a higher percentage. A lot of questions have obviously arisen.

Why has the market run?

Most market players would agree that an upward re-rating on the ZSE was way overdue. Most stock prices, adjusted to USD levels, were at historic lows. This has no consideration the capex spent over the years. An increase in prices was expected, but it is the way in which it happened that is raising eyebrows. A slow, gradual bull run is what market players anticipated. To make it even more intriguing, the parallel market seems to have been muted. Theories abound mostly pointing to a government related fund pouring lots of liquidity into the market – via fund managers. If that is true, why the rush? Why would they be that reckless in a market that has been liquidity starved?
These questions bring us to our next question:

Is this run sustainable?

We do not think so for a couple of reasons. As trading closed on Friday – we began to see some selling creeping in, especially in the heavyweights, and buying disappearing? Delta ended net offered with no buyer at market. Could the big-pocketed buyer(s) have run out of liquidity? Or will they be back on Monday? In addition, these high prices will entice speculative sellers into the market who may see the opportunity in offloading and buying USD since the rate has been flat to down over the last week. This is called profit taking. In addition, there is generally a month-end rush by fund managers to present good books to Trustees and boost management fees calculated using ending of month portfolio values. Next week signals the start of a new month and we doubt if the same buying momentum will be sustained. Foreigners have also been net sellers of late exiting Zimbabwe via the interbank, where we are told they were being given allocations. At these new prices, they may try capitalise and leave Zimbabwe at relatively better rates.

Econet and Cassava will be the counters to watch on Monday as the company enters a closed period and the buy-back programme is expected to stop. While we expect prices to come off, we do not expect them to decline to the pre-rally levels.

Lets see what the first week of February brings!

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About Us

We are a team of independent analysts whose primary focus is research into the Zimbabwean parallel markets as well as the stock market. We strive to bring you the most accurate rates in the market and our independence means we have no bias on these rates. You need to make your business decisions and we strive to be your best source of information.


As Market Watch we do not deal in the parallel market nor do we quote on behalf of any other person or company. We are not traders and cannot be accountable for any decisions you make around our data. We are researchers only so please do not assume our information is accurate. Our information comes from various sources including social media as well as market informants on the street. For official USD and RTGS rates please consult your banking partner or the Reserve bank of Zimbabwe. Please note it is illegal to deal on the parallel market and we strongly advise against it. Our platform documents the rumoured parallel market that is mentioned on social media and various other sources.

The Lingo


The ‘Old Mutual Implied Rate’ is a comparison between the Old Mutual share price on the London stock exchange / the Johannesburg stock exchange and the Zimbabwe stock exchange. Effectively RTGS is valued at 1:1 with the USD, but this difference in share price gives us the implied countries exchange rate.


Real-time gross settlement systems (RTGS) is a funds transfer system where money transfer takes place from one bank to another on a “real time” basis and “gross” basis. Settlement in the “real time” means that the transaction happens almost immediately.


The Zimbabwe Bond Note is a surrogate currency issued by the Reserve Bank of Zimbabwe. This was originally issued against a loan facility from the African Export-Import Bank. The Bond Note is officially 1:1 however the market seems to have significantly discounted the value of the Bond Note.


The symbol ZAR is the currency abbreviation for the South African rand.