By BUUMBA CHIMBULU
LUSAKA Securities Exchange (LuSE) total market capitalisation last year hit K57.5 billion in absolute terms despite four sectors registering the biggest reduction in capitalisation.
In absolute terms, LuSE’s total market capitalisation was K57.5 billion in 2020 compared to K56.7 billion in 2019.
This represents a growth of K846 million or 1.5 percent, according to PWC Zambia Country Senior Partner, Andrew Chibuye.
Mr Chibuye said this in the PwC Zambia Listed Companies Analysis Report which looks at how businesses listed on the LuSE performed under the Covid-19 environment.
ZCCM Investment Holdings recorded the largest gain in terms of market capitalisation during the year to 31 December 2020 with an increase of K1.66 billion to K6.24 billion, up from K4.58 billion on 31 December 2019.
“Our analysis shows that 10 out of the 24 companies listed on LuSE accounted for 94.8 percent of the total market capitalisation in 2020.
“This is in line with 2019 when 10 of the companies listed represented 94.1 percent. Furthermore, one company, Shoprite Holdings, accounted for 60 percent of the total market capitalisation, with a value of K34.2 billion in both 2020 and 2019,” he said.
Mr Chibuye stated that due to the impact of currency volatility on companies’ performance in 2020, PwC Zambia also analysed the market capitalisation in United States terms.
The results, he explained, showed that as of 31 December 2020 the market capitalisation for all the companies listed on LuSE was US$2.7 billion compared to US$4 billion on 31 December 2019, showing a reduction of US$1.3 billion between 2019 and 2020.
Mr Chibuye also said four sectors namely financials, telecoms, utilities and oil and gas saw the biggest reduction in capitalisation.
He attributed the reduction mainly to the fall in the share price of companies in these sectors due to slow economic activities and a weak and unstable currency between the two reporting dates.
“Among the 24 companies listed on LuSE, we noted that 11 companies recorded a reduction in market capitalisation, five recorded an increase and no movement was recorded for eight companies between 31 December 2019 and 31 December 2020,” Mr Chibuye said.