Old Mutual, Delta excite foreign buyers

HARARE - Foreign investors were net buyers of $1,3 million shares on the Zimbabwe Stock Exchange (ZSE) in last week, with particular interest in Old Mutual and Delta Corporation.

According to figures from the local bourse, foreign purchases accounted for $13,3 million worth of shares while sales amounted to $20,8 million during the period under review.

Of the $13,3 million shares bought, Old Mutual accounted for $866 680 million and Delta $439 440.

The other two counters to record positive net buying were African Sun $10 032 and Starafrica corporation $1 169.

Old Mutual’s return to the ZSE in June after the parent company completed a restructuring process, which ended its 19-year stint on the London Stock Exchange, is still attracting interest from foreigners.

Old Mutual shares were listed on the Johannesburg Stock Exchange with a secondary listing on the Nairobi Securities Exchange (ZSE) and the Malawi Stock Exchange.

The listed assurer split the group into four independent businesses Old Mutual Emerging Markets, NedBank Group, Old Mutual Wealth and Old Mutual Asset Management as part of a strategy to unlock and create significant long-term value as well as removing the significant costs arising from the current structure following the introduction of bond notes in November 2016.

Old Mutual has said it has plans to venture into the tourism industry after acquiring 6,6 hectares of land in Victoria Falls.

The company is reportedly still in negotiations with the Victoria Falls municipality to get approval to construct a tourism-related facility in the resort town.

Old Mutual has also been expanding its green zone concept. The green zone concept offers the group’s clients financial and banking services under office.

Jonas Mushosho, the group’s chief executive, said the expansion demonstrated the financial service group’s commitment to Zimbabwe, and Africa.

Stock brokers say interest in Delta could be a result of the company’s consistency in continuously engaging government and the financial sector to find ways of addressing foreign currency shortages that affects its production.

Delta last Wednesday recorded a 77 percent increase in after tax profit to $57,2 million in the half year to September 30, 2018, driven by increased lager sales.

The beverages maker saw its revenue increase by 37 percent to $341,4 million, compared to $250,1 million recorded same period last year after lager beer volumes grew by 54 percent, sorghum beer two percent and sparkling beverages three percent.

As a result, EBITDA increased 54 percent to $81,8 million, while earnings per share rose 75 percent to $4,63 cents.

Pearson Gowero, the group’s chief executive, told analysts that while performance was firm across all units, the company is facing various production challenges.

“The company had an exceptional performance notwithstanding the currency shortages that slowed the Chibuku and soft drinks businesses,” he said.

He added that during the period under review, consumer demand was firm and the company has maintained stable retail prices since 2013.

Gowero noted that operating income increased 73 percent over prior year’s, driven by a buoyant Chibuku Super contribution in the sorghum beer category.

Comments (1)

Foreign buyers are excitedly buying old mutual in order to get their money out of Zw - full stop. Not because they are thinking OM is a wonderful company - far from it !

ace mukadota - 20 November 2018

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