Interfin lists at a premium

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Interfin Financial Services Limited yesterday sealed its reverse take-over of CFX Financial Services and traded on the Zimbabwe Stock Exchange (ZSE) for the first time around mid-morning, at a price that surpassed the expectations of the market.
“We saw potential where everyone else saw risk,” Farai Rwodzi, Interfin chairman, said just before trades opened. “Today the deal is done. We have a solid balance sheet; Interfin will never be the same again.”
From the first asking price of 30 cents — just what the financial services group was happy with — trades opened at 40 cents and closed at 45 cents bid with a total of 53 390 shares changing hands.
The opening price was 10 times more than CFX’s closing price of 0,04 cents on Friday.
The largest volume of shares was traded at 45 cents when 50 390 shares were offered, including a book-over of 48 390 shares.
The willingness to sell was only 3 000 shares at 30 cents.
Wellington Mapedzamombe, Interfin Securities general manger, said the share performance of the diversified financial services group on listing beat the expectations of the market, and projected it would maintain a 30-40 cent range through this week.
“We were expecting it to reach 40 cents at most, but there is no problem with people paying a premium for no shares,” Mapedzamombe said.
“For the rest of this week, it should trade within 30-40 cents because nothing fundamental has changed to cause any major price changes.”
Interfin — ZSE’s sixth financial services entity — listed as parent to four operations, namely Interfin Bank Limited, Interfin Merchant Bank, Interfin Securities and Altfin Insurance.
The company acquired a controlling stake in CFX last year after shareholders of the financially-distressed banking institution either ignored or failed to take up their rights in a $10 million equity offering underwritten by the acquirer.
Only 1% of the company’s shareholders subscribed, making it the country’s worst equity offering on record.
Technically, the underwriter commits to buy up whatever remains of an equity offering in the case of under-subscription.
CFX had floated the equity offering to raise the minimum capital requirements set by the Reserve Bank of Zimbabwe following the collapse of its equity-financing negotiations with the Finance Bank of Zambia.
The minimum capital requirements had been phased into two to give banking institutions ample time to recapitalise.
The second installment was due by March 31 this year which would bring the capital floor to $12,5 million.