June was another good, if not a great month for those who chose to invest in the ZSE. Amongst the highlights were an amazing charge by once beleaguered microfinance institution Getbucks, only 12 counters losing money and the continued charge of the small-cap index stocks. The index as a whole rose to higher highs. The return of SeedCo Limited to offset the now confirmed move of Padenga Holdings to the Victoria Falls Exchange was also welcome news.
The ZSE closed in June at 748256.60. Gains during June were 19.07% although SeedCo contributed to that by returning to the ZSE after its deal to be acquired by VFEX listed SeedCo international was scuppered by the RBZ. Year to date that puts the ZSE’s gains at 134% which is impressive by any standard. Growing 19% compared to the previous months 15% the fears of overheating of the exchange are seeming more and more real.
The obvious highlight of the indices is the small-cap index. It sits head and shoulders above the rest on a year to date as the image clearly shows. It is well over 10 times the ZSE’s 134% YTD. Nothing separates the Top 10 and Top 15 indices at 88.31% and 84.68% respectively while the Medium Cap index offered just over double the returns of the top 10 and Top 15. A look at the sector indices shows industrials (321.78%) and real estate (292.44%) have given the best performance while materials have brought decent returns at 189.38%. Consumer Discretionary (132.01%), Consumer Staples (157.55%), ICT (153.05%) have all performed average or thereabouts while mining (53.67%) and financials (69.38%) lag. When looking at the chart remember that the indices are not mutually exclusive. It might be helpful to look at the blue bars (capitalisation indices) as one chart and the coloured bars as another chart.
Capitalisation indices updates
With June bringing a close to the 2nd quarter the ZSE also published their updates to the capitalisation indices which you can view here. Some highlights for your consideration include national Foods and Simbisa which moved into the top 10. VFEX bound Padenga holdings and BAT gave up their Top 10 positions for the aforementioned pair. Getbucks and National Tyre Services made the move from the small-cap index to medium caps. Turnall, CAFCA and Zimplow moved down to the small-cap index because SeedCo’s return meant an additional counter in the medium caps.
It was a very positive month with not much to complain about save for a few counters. There were 12 counters which recorded losses on the month. OK Zimbabwe being the biggest loser dropping 16.64%. RioZim (-11.22%), Axia (-9.41%), TSL (-9.09%), Bindura (-7.82%), Cassava (-6.32%), Nampak (-4.73%), Padenga (-3.82%), Proplastics (-1.93%), ART (-1.67%), Cafca (-0.79%) and Edgars (-0.74%) made up the rest of the losers for the month.
Huge gains were witnessed in Getbucks for the second month running. The lender is pushing for a new capital injection from shareholders to help meet minimum capital requirements so they can keep their valuable banking licence. Star Africa (276.71%), General Beltings (271.81%), Willdale (176.95%), returnee SeedCo Limited (142.96%), African Sun (108.17%), Rainbow Tourism Group (94.68%), Daribord (90.61%), Unifreight (75.13%) and Truworths (66.67%) made up the top 10 gainers in a month that had 36 gainers. NMB Bank joined the usual non-mover ZECO to register the same closing and opening figure.
Small-Cap House of cards?
The last few trading days of June saw sharp declines in counters in the small-cap index which had previously performed very well for holders. Star Africa, Getbucks, General Beltings and Willdale all registered significant drops and panic may start to set into the market. What was likely some extreme profit taking should settle out over July. Small caps should see the year out as the best returners.