Major moves among ZSE heavies

THE Zimbabwe Stock Exchange (ZSE)’s latest review of its Top 10 Index constituents has seen four counters being displaced from the heavies list.
The list is reviewed on a quarterly basis, but could not be appraised at the end of June as trading on the market was suspended at the time.

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A September 30 review saw Old Mutual (OM), SeedCo International, British American Tobacco Zimbabwe (BAT) and National Foods (NatFoods) falling out to make room for CBZ Holdings (CBZ), FBC Holdings (FBC), SeedCo and Rainbow Tourism Group (RTG).

This follows a government directive for trading in fungible stocks on the exchange — OM, SeedCo International and PPC — to be suspended, under the pretext that they were driving the country’s inflation, reported for July at 840 percent.

It also comes as CBZ, FBC, RTG and SeedCo have seen sizable gains relative to BAT and NatFoods, over the period under review.
Between April 01 and September 30, BAT and NatFoods gained 162 percent and 81,5 percent in that order.

CBZ, FBC, RTG and SeedCo, however, gained 3 335 percent, 1 183 percent, 497 percent and 400 percent, respectively.
Meanwhile, CBZ, which recently escaped a potentially crippling fine by the United States’ Office of Foreign Assets Control, now has the biggest market capitalisation on the ZSE at $29 billion.

CBZ now accounts for about a tenth of the local bourse’s entire valuation after leap-frogging long-time heavies Delta, Econet and Cassava.
Delta’s market value is now $21 billion, while Econet and Cassava are worth $12 billion and $11 billion respectively.

The official exclusion from the Top 10 list, of OM and SeedCo International could also see the ZSE finally launching its first Exchange Traded Fund (ETF) – a mutual fund that tracks movements in other assets.

Justin Bgoni, the ZSE chief executive recently told The Financial Gazette that the continued suspension from trading of OM and SeedCo International had frustrated the exchange’s plans to launch a Top 10 Index ETF.

“We were very close to introducing an ETF, but two things stopped us. The first was Covid-19, and the second was the closure of the exchange in June… we wanted to launch a Top 10 ETF, so now even with the resumption of trading, SeedCo International and OM, which are currently suspended, were part of the constituents, meaning the suspension has foiled all our plans, but something will happen before the end of the year,” he said.

Government has suggested that the fungible stocks be listed on a soon to be launched US dollar-only market, and SeedCo International has already expressed interest.
It remains unclear, however, if OM and PPC will list on the planned exchange. newsdesk@fingaz.co.zw