Firms go digital to cut listing costs

HARARE - Zimbabwe Stock Exchange-listed companies are increasingly opting for electronic platforms to cut costs on publishing financials and other documents.

This comes as most firms are distressed due to the acute liquidity crisis prevailing in the country.

According to the bourse, the trend is, however, in violation of listing rules which require the listed companies to publish all announcements in at least two national English language newspapers.

Recently, diversified group Radar Holdings (Radar) said it was considering switching to the electronic format in delivering its communications in order to curb costs.

“Expenses associated with preparation and delivery of physical copies of annual reports, shareholder notices and related documents has always been going up over the years,” the group’s company secretary Albert Chigova said.

“In order to manage these costs,” he said “the company would like to send electronic documents in place of physical documents thereby saving on printing and postage costs”.

He added that electronic documents reach recipients earlier than those sent through postal services while they also offer easy storage and quick retrieval of documents from anywhere.

This comes as various firms have delisted from the stock exchange in the past few months due to non-performance of their stocks, slackening economic growth and depressed financial performance.

Last December, the bourse’s chairperson Eve Gadzikwa said only 10 companies out of the 64 listed are in “good shape”.

“The rest are tottering,” she said, adding that “it is an industrial Armageddon.”

Information gathered by businessdaily revealed that a record 12 companies have departed from the local bourse over the past five years.

Several listed entities are voluntarily leaving the ZSE, saying they are not realising value while others are saying new investors are increasing their individual shareholding beyond the bourse’s prescribed threshold.

Horticultural concern Interfresh Limited (Interfresh) delisted early this year after the company indicated that its stock was not reflecting true value on the local bourse and was consistently traded at a discount to net asset value.

On another note, insurance group Zimre Holdings Limited is also considering delisting from the equities market, as it remains depressed and is offering no shareholder value.

Albert Nduna, the group’s chief executive, last week said stocks are undervalued while it is increasingly difficult to raise capital on the 65-counter bourse.

“The valuation of shares on the ZSE worries shareholders and managers to the extent that some are advocating delisting. The stock exchange is there to raise capital and if you cannot do that, then it worries shareholders,” Nduna said.

Comments (1)

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