ZSE slumps 33% in July

The Zimbabwe Stock Exchange shed 33.06% in the month of July as contractionary monetary policy measures continued to have an effect on many parts of the economy. After a massive bull run it’s safe to say equity markets are currently in bearish conditions. The ZSE had more losers than gainers, 2:1 to be exact. In the course of July, the ZSE also said goodbye to another counter in Zimplow as it switched over to the Victoria Falls Stock Exchange.

Gainers

Every cloud has a silver lining. In spite of the massive losses across the exchange, there were winners. And big winners at that. Nampak was chief amongst them with a 116.63% return in the month. Masimba (+69.69%), Fidelity (+56.31%) and Rainbow Tourism Group (+54.64%) all brought returns above 50% to investors. The rest of the top 10 gainers were made up of General Beltings (+47.83%), CAFCA (+35.86%), First Mutual Holdings (+30.88%), Getbucks (+30.45%), Turnall (+21.74%) and Cass Saddle Agricultural Index ETF (+18.09%). While these gains are impressive in and of themself it is worth noting that in the period exchange rate movements were in favour of the Zimbabwean dollar. In simple terms, the gains were even bigger when converted to US dollar terms.

Losers

As mentioned before the losers far outweighed the gainers. Whilst the losses were more contained they were simply of greater magnitude and quantity. CBZ shed a ridiculous 63.56%. RioZim (-56.50%), OK Zimbabwe (-53.66%) which uncharacteristically delayed full year results, and Meikles (-50.19%)  had losses over 50% in the month. The bottom 10 was littered with more heavyweight counters. Delta (-49.21%), Ecocash (-42.83%), Old Mutual ZSE Top 10 ETF (-41.34%), Econet (-41.05%), FBC Holdings (-40.35%) and Dairibord (-37.18%) made up the rest of the bottom 10. As with the gains, these losses are less stark when you factor in exchange rate movements. ZECO and the two Bridgefort Classes were once again, non-movers for the month.

ETFs and REIT

A quick look at the funds shows a similar picture 2 out of 6 being positive in the month. The Cass Saddle Agriculture Index extolled the virtues of Index funds as it gained investors 18.09%. The Morgan and Co Multi Sector ETF scored a point for the managed funds with a 14.05% gain. The rest of the board was in the red. Morgan and Co Made In Zimbabwe ETF lost 7.86%. Datvest Modified Consumer Staples ETF lost 29.33% while The Tigere Real Estate Investment Trust crashed 33.33%.  The biggest loser among the funds was the OMTT in response to the major losses in heavyweights.

VFEX

Another bittersweet month on the VFEX. More bitter than sweet as the addition of Zimplow to the gang was overshadowed by losses in 8 out of 13 counters. First Capital Bank recovered from the losses of the previous month to boost investors by 11.11%. National Foods was the only other gainer with a marginal 0.50% gain. The Nedbank ZDR and WestProp recorded no movement during the month. The red dominated the role call with SeedCo International (-7.43%), Bindura (-11.88%), Simbisa (-12.50%), Padenga (-14.63%), Caledonia ZDR (-15.63%), African Sun (-30.56%) and Axia (-32.82%) all losing investor value.

While the monetary fundamentals have shaken exchanges across the board there is a hint that the VFEX may have been shaken a little more. This can be partially explained through the smaller number of counters. The big question is can the monetary situation hold for much longer? It rarely does but with upcoming elections, we may see a horizontal market in August.