The Zimbabwe Stock exchange has this year at least been one of the best places to invest money in the short term in Zimbabwe. In addition to beating inflation returns on the ZSE have also beaten that crazy foreign exchange rate. This year the ZSE has gained 503.78% to August 31st. Now if you factor in that not only was the ZSE closed for one full month but also lost quite a lot of ground after closure you will see that this exchange is surely giving back great returns. Sadly we cannot exactly go and buy the whole exchange as we would with index funds which match the exchange in a smaller portfolio. Instead, we have to buy individual stocks unless you go the mutual fund route which is another story altogether.
Numbers don’t lie
Let’s a do a little bit of comparison of the ZSE to other forces around it. Here we are still looking at the whole exchange (including the losers and yes there are losers) versus matters such as inflation, the official exchange rate, the parallel exchange rate. The graph shows that the ZSE has beaten all the above so in simple terms the returns there are truly positive even after considering inflation.
As mentioned before we cannot, easily at least buy the whole exchange, we have to pick individual counters on the exchange. So let’s look at the top 10 risers on the ZSE as at 31 August 2020. We will look at percentage returns in the functional currency the Zimbabwean dollar. All returns expressed as percentages rather than dollar value gains as prices differ.
CBZ is a big banking group that has risen to king this year on the ZSE. CBZ offers commercial banking, merchant banking and insurance among a host of many other products in their portfolio.
CAFCA is a manufacturer of cables used in communication infrastructure. Their decision to build up a buffer inventory worth 6 months of orders paid off big-time as it protected their foreign currency based income and catapulted the value of their shares.
Bindura Nickel Company (2345.55%)
Bindura is a mining company that is mostly involved in nickel but does handle other materials. BNC’s purchase by a new undisclosed owner in October 2019 seems to have injected confidence in the counters future as the price suggests.
Amalgamated regional trading (1560.15%)
ART is as the name suggests an amalgamation of companies in a number of industries. Their operation span Stationery and paper products all the way to Batteries through Exide. They also include National Waste Collections which is a recycler of paper.
Zimre Holding Limited (1400%)
Zimre is a holding company of companies that are mostly in the financial industry in the area of insurance. These subsidiaries include Fidelity Life Assurance and genesis Financial Holdings Limited among others.
Dawn Properties (1393.15%)
Dawn is a property management company that itself spread across many types of real estate. Dawns rise if fairly recent as African Sun is in the process of acquiring Dawn as they look to bring the property in house.
ZB Financial Holdings (1373/29%)
ZB financial holdings is a financial services giant in Zimbabwe. Their operations span banking, insurance and other financial services.
FBC Holdings (1279.31%)
FBC Holdings is a financial services group. While FBC is like many of the other related banking institutions listed here they have an interesting story. FBC had a very recent rise in their share price attributed to the bank making a large income of financial trading and not just bank business.
First Mutual Properties (1076.47%)
Another property company features in the top 10. First Mutual Properties is a division of the First Mutual Empire. They manage various commercial property across the nation.
It’s important to note that these returns apply as of 31 August 2020. Most if not all shares peaked higher than these levels before the shut down of the ZSE. There’s a lot happy hunting to be done on the Zimbabwe Stock Exchange.