The Bulls are back in town ZSE up 7.78% in September

The ZSE bounced back from four consecutive months of recording month-on-month losses to post a 7.78% gain which is welcome news to investors who were feeling the pressure of regulation. The movement was seen across the board, with 28 gainers in September versus 21 losers. The market skewed towards gainers for the first time since the economic measures were implemented. As expected, investors needed time to digest the changes and what they meant for them before the market found a new normal.

Gainers

While there were gains across the board, the biggest winner in September was Fidelity which returned an impressive double plus to investors. Ariston Holdings performed well for investors returning 61.19% and making the top 10 gainers for the 2nd consecutive month. Masimba holdings recorded the third highest climb at 49.31%. One of the hardest hit counters by the market correction, Ecocash holdings, recovered 47.49% for investors. The rest of the top 10 gainers were a mixed bag with Truworths (39.04%), Unifreight (38.89%), SeedCo (38.59%), BAT (34.76%), the Cass Saddle Agriculture index ETF (33.55%) and the embattled Datvest Modified  Consumer Staples ETF (32.57%) making up the list. It’s important to note that the gains were not recorded uniformly throughout the month but rather came in a frenzy in the final week and a half of September.

Losers

Every rose has its thorns, and even a market on the ascent has a few cases of companies that lose value. First Capital Bank was the biggest loser in September (-58.26%) after being king of the gainers in August. Old Mutual Zimbabwe Limited dropped significantly (-34.78%). The Finsec listed counter sees little activity and rarely treads backwards. TSL (-34.69%), once high flyer Tanganda (-31.45%), Turnall (-27.46%), Zimpapers (-25%), troubled Bridge Fort Class A (-24.51%), Banking group FBC (23.40%), another former high flyer Axia (-20.22%) and the seemingly unlucky Lafarge (-17.58%) made up the 10 biggest losers in September.

ETFs and VFEX

The ETF board regained some green. CSAG and DMCS were noted amongst the top 10 gainers. The Morgan and Co Made In Zimbabwe ETF gained 6.56%, while heavyweights movements started the Old Mutual Top Ten ETF recovery. The Morgan and Co Multi-Sector ETF surrendered 1.10% in September as the only loser on the ETF board.

Meanwhile, trading in Victoria falls also presented a mixed bag of results. Bindura Nickel Corporation continued its slide, this time dropping 1.29%. Caledonia once again recorded zero movements. Padenga surged 5.88% in September, also dropping impressive full-year financial results. SeedCo International also put on 18.55% in September to make an overall VFEX index gain of 162.23%.

Indices

A look at the indices board for the month versus year-to-date tells a very interesting story. The top 10 index gained 11.34%, and with more likely to come buys in the top 10 or the OMTT will look like inspired strokes of genius in a few months’ time if all else remains equal. Small Caps took a 3.13% hit. Looking at it from a YTD perspective, the top 10 and All share indices seem joined at the hip, and this shouldn’t change going forward. The VFEX all share index now stands at an unthinkable 216.89%, with a quarter of the year still to go.

Simbisa and Getbucks plot VFEX moves

While the numbers on the VFEX look good, the uptake has been mild at best. Simbisa brands and Getbucks announced and reiterated, respectively, their desires to move to the West of Zimbabwe. With all due respect to Getbucks, Simbisa’s announcement caught all the attention. The big question people asked was, what happens to their Simbisa shares? In case you have pondered but not answered, the shares remain in your name when they cross over. They will be assigned a US dollar value. You may have to make arrangements to move your holdings to a new broker or CSD account if your current one does not operate on the VFEX. Simbisa is also topical because of its presence in multiple ETFs, and there have been many theories about how it would be treated if and when it moves. Remember, when you buy an ETF, you buy a fund, not the shares the fund holds. So if you have an ETF with Simbisa in it, the fund manager will dispose of Simbisa as though it exited the fund. Think of the OMTT when something falls out of the top 10. Every time there’s an announcement about somebody moving to the VFEX, there’s a little panic about the ZSE. But just off the top of my head, we are still waiting for Old Mutual, PPC and CBZ to make moves to the VFEX.

Outlook

Hope springs eternal in the investor, and it’s hard to argue against it. Measures placed on the economy hit hard and drained a lot of confidence out of the market. Those who remained confident and continued to pick up their favourite assets at low prices are smiling now. The stock market looks like it’s just finding its feet again, and while the title of the article says the bulls are back in town, it’s not time to celebrate yet. However, it is always the right time for the investor to buy the right company.