More delistings loom

HARARE - More delistings loom on the Zimbabwe Stock Exchange (ZSE) this year, according to a report in the latest 2014 Central African Stock Exchange (Case) handbook released on Wednesday.

This comes as a record 12 companies departed from the local bourse on the back of slackening economic growth and depressed financial performance, among other challenges.

“…it is possible that at least two other companies will delist this year,” the report said.

In April, agro-focused firm Chemco delisted after having applied for voluntary suspension in 2012.

Apex Corporation, one of the oldest counters on the bourse, was struck off the ZSE’s register in July last year after applying for voluntary suspension a month earlier while it was under judicial management.

In December last year, horticultural concern Interfresh delisted following its shareholders’ approval to voluntarily leave the bourse.

The group argued that its shares had consistently traded at a discount to net asset value and raising capital at the current valuation on the ZSE had “proved rather limiting”.

The case report, which noted that Zambia was the only market to record a listing in the region last year, said Tawanda Nyambirai’s Lifestyle Holdings delisted on June 10 last year, having been suspended from trading in April the same year.

The furniture manufacturing company has since been experiencing rapid down-sizing over the past year and has closed 12 branches whilst retrenching an unspecified number of its 1 420 employees.

Financial group Trust Holdings voluntarily delisted in November.

Food processor Cairns Holdings (Cairns) also left the bourse after a suspension while Gulliver Consolidated delisted in June 2013 for failing to produce financial statements within the required period.

In June last year, ZSE opted to delist Steelnet after the High Court granted a final liquidation on May 8.

Meanwhile, the ZSE’s market capitalisation slumped by $642,8 million to $4,56 billion in the first quarter of 2014 as stock prices plummeted, according to an AfraAsia Holdings Zimbabwe Limited (AfrAsia) report.

The financial group said the slackening economic growth and disappointing 2013 companies’ performance contributed to weakening stock prices across the board.

“The equities market has also been affected by delistings and suspensions which peaked in 2013 as companies faced mounting viability challenges,” said the report.

The bourse’s mainstream index closed the quarter 12,76 percent lower at 176,32 points whilst the resource index dropped 35,55 percent to 29,51 points — the lowest since 2009.

AfrAsia noted that the stock market took a knock soon after the July 31, 2013 and since then has struggled to find traction.

Following the polls, the bourse lost nearly $1 billion in a week with market capitalisation plunging 15,68 percent to $5 billion from $5,96 billion.

“Overall turnover for the quarter was down eight percent to $118,7 million from the previous quarter turnover of $128,8 million as foreign investors buying declined by four percent to $79,4 million from $82,7 million,” AfrAsia said.

Net buying — foreign buys less foreign sales, increased to $32 million during the quarter from $14, 8 million as at December 31, 2014.

Foreign buying as a ratio of total turnover also went up to 67 percent in the first quarter of this year from 64 percent in the last quarter of 2013.

Comments (3)

the zim dollar was decommissioned ; were left with useless bearers. and already we are holding many share certificates of delisted counters . can we be protected. Companies that intend to delist must pay minorities in cash first.

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WERTHJITFCF - 23 May 2014

A sad development indeed! As for Lifestyle Holdings this was due to inexperience of the present & immediate past C.E.O's. Manufacturing is a totally different prospect to banking where they enrich themselves on the back of the depositors.

saundy - 26 May 2014

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