After what could best be described as a turbulent year, the ZSE picked up to a very good start in 2023. The ZSE All Share index put on 17.03% in January 2023. This will please many investors regarding the prospects of the bourse. Sadly it’s not all good news, as a wave of VFEX migrations will literally decimate the ZSE.
The All Share Index performed well on the back of a mixed bag of high performers. 4 of the top 10 gainers on the ZSE are agriculture-related concerns, while 3 are involved in the construction industry. One insurer and media company round up the top 10 gainers. At the other end of the spectrum, financial services companies are four of the bottom ten losers. The rest of the bottom 10 is a truly mixed bag.
The top 10 index put on 12.29%. The biggest rally was seen in the mid-cap stocks, which gained a whopping 31.54%, while small-caps brought down the average returning only 10.23%.
VFEX-bound SeedCo Limited was king of the Hill in January, returning investors a commendable 192.81%. Hippo Valley Estates also provided impressive growth of 119.06%, while Propastics slid under the radar to grow investor funds by 78.64%. The ZSE had a total of 29 gainers in the opening month of 2023. Zimre (75.97%), Tanganda (73.72%), Dairinord (71.00%), Willdale (69.44%), Miekles (44.12%), Masimba (43.33%) and Zimpapers (42.43%) made up the rest of the top 10 gainers.
The losers were outweighed by gainers in January 2023, a good signal for investors. Only 12 counters lost ground, and there were seven further non-movers. First Mutual Holdings captured the wooden spoon by quite a margin losing 25.59% in the month. The recent high flyer First Capital Bank was brought back to earth, losing 16.19%. Mashonaland Holdings slid a further 13.41% as its market price lined up with the ZBFH offer to minorities. Star Africa (-11.08%j, Truworths (-9.09%), VFEX destined Asia (-7.02%), NMBZ (-4.48%), DatvestModified Consumer Staples ETF (-3.85%), General Belting (-2.56%) and FBC Holdings (-2.47%) closed out the bottom 10. Frequent non-mover ZECO was joined by Bridge Fort Capital A and B, Fidelity, NTS, RioZim, ZB and Finsec Listed Old Mutual Zimbabwe Limited in registering no movement in January.
A quick look at the funds (ETFs and REITs) shows a positive January. Cass Saddle Agriculture Index ETF had the best performance gaining 25%. It was closely followed by Zimbabwe’s first listed REIT Tigere, which gained 23.51%. The Old Mutual Top Ten ETF gained 17.39%. Both Morgan and Co offerings, the Multi-Sector ETF and the Maide In Zimbabwe ETF, gained 13.99% and 6.33%, respectively. The only loser on the board was the aforementioned Datvest Modified Consumer Staples.
ETF + REIT
Over to the West, the VFEX heated up thanks to activity from two recent switches from the ZSE in Natfoods (21.47%) and Simbisa Brands (9.40%). Bindura Nickel Corporation continued what is starting to feel like a never-ending decline losing a further 23.33%. The Nedbank ZDR gave up 13.27% in January. SeedCo International dropped 4.13%, while Padenga Holdings marginally slipped by 0.56%. The Caledonia ZDR traded horizontally.
The spate of migrations to the VFEX is starting to unsettle Zimbabweans. To date, five companies have already switched from the capital to the resort town. A further three companies (Innscor, Axia and SeedCo) will make the switch. Of the companies that have mulled the VFEX switch publicly, Getbucks has pulled out, preferring complete delisting, while CBZ seems to favour merger and acquisition plans in the short term. While very few people batted an eyelid when Bindura Nickel Corporation and Pedenga made a move, the current group of movers are or were recently members of the top 10. The worry is that the ZSE is losing its cream to the VFEX, which has only managed the listing of two depositary receipts (Caledonia and Nedbank) organically.