“It was a terrific year at the Zimbabwe Stock Exchange. The market’s main index climbed 31%”, writes Ryan Hoover of the ZSE Industrial Index, as part of the reviews of Africa stock exchange investments on the excellent website www.investinginafrica.net.
According to him: “Foreign investors saw relatively inexpensive assets, priced in dollars, in an economy with relatively cheap foreign exchange controls. And they swamped the market. Foreigners accounted for more than 80% of trade volume during the second half of the year.”
He highlights Zimbabwe’s top stocks of 2013:
5. Padenga Holdings +86.7%
One of the top performers has real bite, it raises alligators and crocodiles for production of luxury shoes, belts, and watchbands. Padenga, which also has a farm in Texas, USA, and a skin-processing facility in Louisiana, is recognized as a global leader in the industry, supplying more than 33% of the global supply of premium crocodile skins. It scored 37% earnings growth over the past 12 months.
4. African Distillers +113.3%
Zimbabwe’s leading purveyor of wine and spirits has seen demand for its locally-produced brandy and whiskey soar, thanks in part to increased duty on alcohol imports. Local beverages now account for over two-thirds of sales. Shareholders approved a $5m rights offer which will be used to build a new cider-processing facility.
3. African Sun +188.9%
The share price nearly tripled in 2013 as Brainworks Capital private equity through its subsidiary Lengrah Investments launched a takeover bid, and in November increased its shareholding to 43% (see story on the great AfricanSENS website)> The deal is not yet concluded but de-listing is likely soon.
2. TSL Limited +204.4%
The company’s main business is tobacco, owning one of the world’s largest sales floors and running the auctions, but it also grows, stores, packages and processes it and operates a conglomerate of other businesses from shipping logistics to car rental (Avis). Earnings were propelled 34% by the good tobacco harvest in 2013. A new growing operation, TSL Classic Leaf, is expected to push results.
1. British American Tobacco Zimbabwe +233.3%
BATZ reported an earnings loss during the first half of 2013, after indigenization laws compelled the company to award $10m worth of shares to employees, a one-off expense that wiped out the company’s 19% increase in gross profit. But this is Zimbabwe’s largest tobacco grower and world prices have been strong, driven by rising demand from Chinese smokers, the largest market for Zimbabwe.
For more on the stocks and review of lots of other markets, check out Ryan’s highly recommended website www.investinginafrica.net, and let him know your top tips for 2014.