BAT, TSL top ZSE performers in 2013

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HARARE — Strong international prices and increased Chinese demand for Zimbabwean tobacco lifted cigarette manufacturer, BAT Zimbabwe and tobacco processor, TSL to top performances on the Zimbabwe Stock Exchange (ZSE) in 2013, a trend likely to be repeated this year, analysts have said.

The Source

BAT’s closing price of 1 200 cents on December 31 was a 233,3% increase on its starting price of 2013, despite reporting an earnings loss in the first half of the year to June 30 and witnessing a 16% slump in domestic cigarette consumption over the same period.

“BAT’s gains are amplified owing to tight liquidity,” noted an analyst. “It is basically too difficult to get BAT shares. The counter was also favoured owing to the strong growth fundamentals attached to the tobacco industry, and the attraction is likely to continue in 2014.”

British American Tobacco International Holdings (UK) Limited, holds a majority 56,95% of the shareholding in the local unit. Other shareholders include Old Mutual with 17,57% and Fed Nominees with 6,56%.

TSL Limited’s share price grew by 204,4% after a good performance from its tobacco arm propelled the company’s earnings growth of 34% in the first half of 2013. The company owns one of the world’s largest tobacco auction floors and is involved in the entire tobacco production chain from growing it to shipping. It also operates the Avis franchise in Zimbabwe.

“TSL is the best turnaround story of 2013,” an analyst told The Source. “It restructured and unlocked huge efficiencies which reflected in robust earnings growth. The company is also tightly held and as such, curtailed liquidity also helped to push values up.”

Among TSL’s shareholders are Closefin Investments with 28,70%, Vanac Investments with 25,27% and Old Mutual which holds 11,54%.

Zimbabwe’s biggest hotelier, African Sun saw its share price shoot up by 200%. Analysts said strategies to improve financial performance through reduction of debt by way of a balance sheet restructuring cemented investors’ interest.

It has opened a hotel in Ghana, a market it had earlier abandoned and is seen to be among top performers in 2014.

Other companies that performed well include Afdis, with a 113,3% growth and Padenga, whose share price rose 86,7% during the year.
The latter is one of the few Zimbabwean businesses with operations on multiple continents and owns a large alligator farm in Texas, United States of America.

Padenga recently built a skin-processing facility in nearby Louisiana and is recognized as a global leader in the industry, supplying more than 33% of the global supply of premium crocodile skins.

“The company’s shares are tightly held and the price can thus easily move with the purchase of a few shares,” noted an analyst.

The ZSE’s industrial index registered over 30% growth in 2013, while the resource index declined by an almost similar margin.

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