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Business, Careers & Technology
ZSE counters too few?
Terence Zimwara
Zimplats is probably the largest mining
the country’s main tourist destinations
The companies are too few to
and the combined value of these
entice global fund managers to
properties is well over $22 million that
look at Zimbabwe as a possible
is not listed and the list extends even
the market is valuing the group.
investment destination. Africa
beyond mining companies.
Africa Sun is not the only counter
is widely seen as a better investment
While the ZSE is thought to be one of
destination with returns higher than
the best performing stock markets on the
Colliery the coal miner is valued at $8
most other continents.
The recent fund managers’ workshop
mass in terms of volumes and transactions
one looks at the assets and inventory of
organized by Imara brought global fund
coal the company owns.
managers to the country and according to
There is just not enough trading;
In normal settings market forces will
transactions mostly involve the blue chip
correct this anomaly; the share price will
counters like Delta Beverages or Econet
rise until it reaches a point where the
invest.
Wireless. The rest of the counters are
market capitalisation will almost be at
“Fund managers are not looking at
par with the book value of a particular
starting businesses here but they wish
once you acquire them.
company.
For a fund manager this situation
said Chinamasa.
is not ideal because it creates a sense
alone have not been able to make this
He explained that during his interaction
there is need for foreign participation as
they were looking at companies that offer
disinvest. It is unhealthy that only about
better prospects and the Zimbabwe Stock
the stock market in large enough volumes
Exchange (ZSE) is one place they will try
to help realign share prices.
So in sense fund managers were
Foreign investors have for the greater
Chinamasa added that one take away
part been reluctant to come because of the
minister that there were a few counters.
perceived country risk. The controversy
there are a few companies listed on the
ZSE. Local business people with brilliant
ideas are not aware of the opportunity to
any other exchange to really attract fund
have combined to create the so called
raise the much needed capital via listing
managers.
on the stock market.
The other issue with the ZSE concerns
investors to commit their resources.
While the government has said it is
companies but about four of these are
shares relative to the underlying values
reforming the exchange to ensure greater
of the companies. Share prices of most
foreign investors that alone will not
While the minister has the impression
entice these investors.
that locals needed to be educated on
value for companies.
Addressing the empowerment laws
as well as the perception that there is
are other reasons why listing is not as
share price was 2.8 cents as at 21 July
no respect for property rights will go a
lucrative.
long way in allaying fears that foreign
just $22 million.
investors still have about Zimbabwe.
that are surprisingly not listed on the ZSE.
The hotel group has vast properties in
Page 70 The Parade - Zimbabwe’s Most Read Lifestyle Magazine
August 2014