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Old Mutual to bulk up on ZSE

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Old Mutual Zimbabwe Limited, the country’s largest long-term savings firm, says it will increase its investments on the Zimbabwe Stock Exchange (ZSE) to 50%, and may do this by acquiring new equity interests in initial public offerings (IPOs) being planned by mining and telecommunications companies.
The firm sees mining and telecommunications as dynamic industries with a vast high-growth potential, given Zimbabwe’s low teledensity of just around 10% and the backlog in mining exploration following a suspension seven years ago.
The mutual fund is currently invested in 40% of ZSE’s 76 listed companies, interests that it acquired through IPOs and rights issues.
The equity interests range from controlling stakes to minority holdings.
One of Zimbabwe’s two unlisted mobile phone operators has announced plans to list on the local bourse, while a limited number of miners are planning to file for stock offerings to comply with the country’s indigenisation and economic empowerment law within the stipulated five-year period.
“We may and we may not,” Old Mutual CEO Luke Ngwerume said in an exclusive interview. “But to us mining and telecommunications are high-growth sectors. So, as we have always done, we may support the IPOs and we may not.”
“Investment decisions are a big issue. We have to look at every investment very carefully and assess whether the investments would be viable for the benefit of policyholders. As an investor, we look at investments in two ways: a top-down approach, where we look at sectors, and bottom-up approach, where we look at company performance.”
“It depends on whether we see a sector as a growing sector and the companies issuing the shares as growing companies. We also look at governance to find out how a company is structured and managed. All we care for is whether the investment will unlock value for investors.”
In the last 18 months, Old Mutual has followed its rights in FBC, OK Zimbabwe Limited, NMB and Star Africa.
A total of nine ZSE-listed companies have floated recapitalisation-related equity offerings since the country “dollarised” in February last year.
Old Mutual’s business is moulded around pension funds and policyholders. Although Old Mutual has a vested interest in equity investments, its portfolio is traditionally property-heavy, a strategy adopted to hedge the investments during Zimbabwe’s downturn.

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