Simbisa, Hippo Valley fall out of ZSE top 10

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SIMBISA Brands (Simbisa) and Hippo Valley Estates (Hippo Valley) have been bumped out of the Zimbabwe Stock Exchange’s (ZSE) Top 10 index by newcomers Cassava Smartech Zimbabwe (Cassava) and SeedCo International.
The index’s constituents were reviewed in line with the ZSE Indices ground rules as at the last day of trading in the quarter ending December 31, 2018.
“Pursuant to the review, Cassava and SeedCo International replaced Simbisa and Hippo Valley Estates and the next review date will be on 31 March 2019,” the exchange said in a statement last week.
British American Tobacco, Delta Corporation, Innscor Africa, Old Mutual, Padenga Holdings and National Foods Holdings make up the rest of the index, along with the newcomers’ parent companies, Econet Wireless Zimbabwe (Econet) and SeedCo.
The changes do not reflect the performances of Simbisa and Hippo Valley on the local equities market. Simbisa gained 63 percent while Hippo Valley added 1,79 percent during the quarter under review to close the year with valuations of $404 million and $330 million respectively.
The counters, however, did not make the grade after Cassava and SeedCo International listed on the local bourse during the same quarter, with valuations of $3,7 billion and $640 million, respectively.
Cassava, which listed on December 18 after it was spun out of Econet, became the most valuable company on the market, taking over from its parent.
Cassava was the first listing of scale of a financial technology company in Africa. Kenya’s Safaricom has been considering spinning off its M-Pesa for years, but has yet to do so.
Following the demerger, Cassava houses EcoCash, Econet Insurance, Econet Life and Steward Bank Limited while Econet’s business model is now focused on telecommunications and media (Kwesé).
Cassava’s financial statements for the year ended February 28, 2018, which were extracted from the group’s pre-demerger results, show that the technology segment’s profits made up 53 percent of Econet’s profit after tax of $132 million.
Meanwhile, Morgan Nzwere, SeedCo’s chief executive, says the parent firm is happy with the results of the unbundling of SeedCo International.
“The stock has been doing well on the Botswana Stock Exchange on which it has generally been trading at a premium of over 200 percent to what our stock is trading at on the Zimbabwe Stock Exchange.
“We managed to raise the money that we needed to raise. We got $20 million in hard cash, which we are deploying into the region to capacitate our business, so yes it has been a very good move.
“We now have adequate capital for our research and for capacitation of our regional businesses,” Nzwere told The Financial Gazette on the sidelines of an analyst briefing in December.
SeedCo International last month posted its first financial results post-unbundling showing that it more than halved its losses during the half year ended September 30, 2018.
The company reported a loss of $1,5 million progressing from a loss of $3,3 million in the prior comparable period.