Econet, Delta excite foreigners

By Paul Nyakazeya

Foreign investors were net buyers of $1 million shares on the Zimbabwe Stock Exchange (ZSE) in September, with particular interest in Delta and Econet.

According to figures from the ZSE, foreign purchases accounted for $21,7 million worth of shares while sales amounted to $22,7 million during the period under review.

Of the $22,7 million shares, Delta accounted for $2,8 million, Econet $2,5 million, Simbisa $1,9 million, Barclays $1,6 million and SeedCo $938 849.

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.

The ZSE-listed firm recently announced that revenue went up 41 percent in the first quarter ended June 30, 2018, mainly on increased lager beer sales.

Lager beer volumes increased 56 percent while sorghum beer volumes for the Zimbabwean unit increased five percent, while the Zambian unit recorded a 23 percent increase.

Revenue in the sorghum beer Zimbabwe unit increased 12 percent while the Zambian unit recorded a six percent increase.

Delta bought a controlling stake in National Breweries Plc in neighbouring Zambia in 2017, its first acquisition outside Zimbabwe National Breweries.

Soft drinks volumes went up 19 percent, while revenue increased 22 percent.

Delta is still in discussions with The Coca-Cola Company (TCCC), as they are still trading under a cautionary after the latter had advised of its intention to terminate the bottlers’ agreement with the group.

Econet Wireless Zimbabwe now has the largest market capitalisation on the ZSE after the local bourse’s decision to include unquoted shares in the company’s valuation on the equities market.

Econet, which now has a market capitalisation of over $3,2 billion, was the second largest company by market capitalisation, with a value of $1,97 billion, second to Delta at $2,7 billion, before the latest development. The changes were made by ZSE on August 1.

During the months under review the company launched a digital service for farmers that offers agricultural commodity prices, farming tips, weather updates and a mobile trading platform linking farmers to buyers.

The mobile telecommunication company which turned 20 years this year developed a loyalty programme designed to reward customer usage of its wide product portfolio.

Interest in Simbisa could have been due to its planned secondary listing on the London Stock Exchange (LSE)’s Alternative Investment Market (AIM) which they last week announced had been postponed to a later date.

The country’s largest fast-food restaurant operator proposed to list in the United Kingdom a year ago, but the deal is yet to be finalised due to regulatory issues.

The country’s largest fast-food outlet reported a 113 percent increase in profit before tax to $20,11 million for the year ended June 30, 2018.

Revenue increased 33 percent to $204,72 million from $154,14 million attributed to organic growth in Zimbabwe and Kenya.

Operating profit increased 60 percent to $28,07 million compared to $17,54 million reported in the previous comparable period.

Barclays Bank Zimbabwe has changed its business model from the cautious lending regime to adopt a more aggressive use of its banking asset.

In its history, the formerly British-owned bank has had very little lending appetite, and maintained a rigorous loaning criteria. Barclays is under transition as it comes under the full stewardship of FMB Capital Holdings Limited. Following the bank’s acquisition by FMB last year, it has been moving to unbundle non-core banking properties into a separate entities. — The Financial Gazette