Cass Saddle sees positives in global crisis

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THE Cass Saddle Agriculture Exchange Traded Fund (ETF) managers are bullish about local companies in the sector, which they expect to benefit from ongoing geopolitical tensions.
The fund invests primarily in Zimbabwe Stock Exchange-listed (ZSE) stocks in the agriculture sector and its associated value chain.
In a statement accompanying the fund’s results for the year to December 31, 2022, manager Calvin Mugabe said they were optimistic about the potential that lies in the agriculture sector and “resultantly the downstream benefits to the agriculture listed stocks on the ZSE”.
“The NDS1 is very deliberate about transforming the economy into an upper middle-income society and agriculture will play a pivotal role.
“The geopolitical tensions and the associated global food crisis will benefit the local agriculture industry, hence listed stocks.
“It is our expectation that bolstered by the improvement in the macro-economic environment, the ETF will continue on its upward growth trajectory,” he said.

A conflict between Russia and Ukraine that began in 2014 escalated into a war in February 2022, disrupting global supply systems of fuel, grain, and other supplies.
The fund was listed on the ZSE on July 15, 2022 at a net asset value of $1,00 per unit and closed at the end of the review period, at a market value of $1,80.
This represented an 80 percent growth during the period, compared to a gain of 21 percent for the All-Share Index.
During the year, the government hiked interest rates and imposed a capital gains tax on disposals of listed securities within 180 days after acquisition.
These developments had a negative impact on the stock market, resulting in a significant pullback that lasted from May 2022 until November 2022.
The fund’s market value has since risen to $2,10 per unit.
During the period under review, the fund received dividends from three counters.
“The fund manager perceived it to be prudent to reinvest the dividends,” Mugabe said.
National Foods, which was one of the fund’s anchor investments at inception, migrated from the ZSE to the US dollar-denominated Victoria Falls Stock Exchange during the period and was removed from the list of counters in the ETF.