ZSE July 2021 performance update

The hottest property in town did it again! The ZSE pushed another month and reached new highs during the month to add 10% to the market as a whole. The market has been on a rampage in 2021 and each month it continues to broaden the smiles on the faces of investors large and small. There were a few notable winners and losers in the market in July as well. The big question is around the market perhaps being overheated and a correction impending soon.

ZSE gains 10%

The ZSE gained 10% in July. Its consecutive in the first 6 months of the year had people cautioning of a correction coming and while it looked like we were due one at the beginning of the month the exchange defied all odds. There was good news for the Old Mutual Top Ten ETF (ETF) which managed to put on a respectable 10% net gain in the month. There’s been palpable disappointment with the performance of the ETF so far. Unsurprising given that the Top Index itself has been lacklustre year to date. The top 10 index managed to gain 15.39% in July 2021. The small-cap index showed no signs of wavering on its performance this year as it gained an impressive 24.77% while the medium cap index gained only 2.71%.

Gainers

Overall there were 35 net risers on the ZSE in July 2021. The most notable returns in the month were witnessed in resurgent cement manufacturer Lafarge who we covered in our underrated stocks with big upsides article. Lafarge gained 58.33% to put it within touching distance of ZWL$100 per share. Zimplow also made noteworthy returns of 50.84% during the month as the outfit has been involved in several important acquisition transactions which it recently reported had finally been concluded. The rest of the top 10 gainers was made up of cable manufacturer CAFCA (40%), NMBZ (37.50%), Truworths (36.74%), Hippo Valley Estates (35.51%), African Sun (33.82%), Medtech Holdings (33.40%), Zimre (31.59%) and recent ZSE returnee SeedCo Limited (31.43%).

Losers

It wasn’t all rainbows and sunshine as there were 13 net losers in July. The biggest losses were realised in last month’s high flyer Getbucks which shed 63.26% of its value. Other big losers were First Capital bank (-21.02%) and brickmaker Willdale (-20.40%). What is notable about the losers in the month is the domination by previously high flying small-cap counters which were dragged back down to earth. Small caps made up 6 of the bottom 10 which also featured NTS (-16.10%), General beltings Holdings (-14.68%), Star Africa (-14.40%) which lost board chairman Mutizwa in what looks like management shakeup since the acquisition of ZAMCO shares by Takura Capital, First Mutual Properties (-12.54%), Ariston (-10.54%), Nampak (-10.34%) and clothing retailer Edgar’s (-7.72%). There were two non-movers in the month, the usual Zeco and ZB Financial Holdings.

Year To Date performance

With 7 months down in 2021 July also marks the 1 year anniversary of the dark period during which the ZSE was closed in 2020. Looking at the Year to date (YTD) performance of counters and indices transport and logistics provider Unifreight Africa (15291.51%) still rules the roost having given shareholders a healthy 150 times their money.  Despite recent downturns, in some of them the small-cap counters still heavily dominate the top 10 year to date returns with only National Foods (766.89%), Lafarge (889.58%) and Nampak (469.55%) not having been members of the small-cap index at any time this year. The rest of the top ten year to date is made up of Getbucks (4519.84%), NTS (3705.46%), Willdale (945.44%), GBH (891.33%), Star Africa (873.81%) and Truworths (711.15%). The ETF has a YTD return of 99.50% which is just about double your money, which is not bad in my book.

The small-cap index stands head and shoulders about the rest in YTD performance returning an incredible 18 times the money if one could’ve invested in it at the start of the year. All other market cap indices pail in comparison with the Medium Cap returning 218.81%, the All-Share returning 159.31% and the Top 10 index returning 159.31%.