Stocks to watch in Zimbabwe in 2018

 After a record 2017, analysts say stocks to watch this year will be in tourism, construction, retail and agriculture.

In the construction sector, Proplastic is on the spotlight given increased demand for its products and its quest to increase exports in the region coupled with the ongoing capital expansion to expand production. Other companies to watch in the construction sector include Masimba basing on its strong order book which the company believes could run through 2019.

In the agriculture sector, companies such as Seedco are expected to benefit from government’s farmer support scheme, Command Agriculture.

The retail sector will continue to benefit from the high prices, but any government crackdown on price increases could hit the sector hard. Companies to watch include OK Zimbabwe and Meikles which part owns the Pick n Pay chain of supermarkets.

In tourism African Sun is expected to benefit from the anticipated increase in arrivals this year. Analysts, however warn that equities in Zimbabwe are still overvalued, as such there might be no significant share price increases in the short to medium term given the anticipated political and economic reforms under the new dispensation.

Top performers in 2017

General Beltings

A penny stock, General Beltings (GB), Zimbabwe’s sole manufacturer of conveyor belts was the top gainer in the year after picking up 900 percent in the year to close at 0.8 cents. The company is valued at $4.3 million. In six months to June GB narrowed its net loss by nearly a third to $254 230 from $360 380 in the prior comparable period, chiefly due to lower operating expenses.  The company saw its capacity utilisation growing to 40 percent in July last year from 11 percent in the first half of 2016, as a government ban on imports spurred volumes.  However, cheaper imports which are smuggled into the country continue to threaten the business.  Delays in foreign currency payments for imports of raw materials as well as servicing legacy and current debts continue to weigh on its operations.

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