2017: A year of bulls, CFI soap opera

From the rampaging bull to the CFI soap opera, 2017 was a rollercoaster year for the Zimbabwe Stock Exchange (ZSE) with market correction taking place after the military stepped in on November 15 to “arrest the deteriorating political, social and economic conditions”.

BY NDAMU SANDU

It was also a year in which Econet Wireless defied the regulator and proceeded with a meeting of shareholders which approved a capital-raising initiative.

ZSE bull run

ZSE indices were on the increase throughout the year with analysts saying the increase in share prices was a result of inflation fears, weakening of the bond note versus the dollar and companies using real time gross settlement balances to buy shares.

The industrial index was at 145,27 on January 3. On November 14, the index was at 534,13 an increase of 267,6%. The mining index was 58,51 on January 3, reaching 138,12 on November 14, an increase of 136%. The bubble burst when the military stepped in on November 15, with prices falling. Analysts said the market was self-correcting. On Wednesday, the industrial index was 323,98 while the mining index was 142,40.

This means that the industrial index more than doubled in the period January to December 27. The mining index rose by 143,3% in the period under review.

Econet rights offer

In February, Econet shareholders approved the raising of $130 million to pay the telecoms firm’s foreign obligations. The bone of contention over the capital raise was a clause which stated that members had to follow their rights by paying the subscription price of the shares and linked debentures in United States dollars directly outside Zimbabwe into the company’s debt service account with Afreximbank. ZSE told Econet to stop the EGM, but the mobile operator defied the regulator. It was such a messy affair which claimed the scalp of the bourse’s chief executive officer Alban Chirume. He was suspended and later left the organisation during the course of the year. The offer was 74,6% subscribed with the underwriter, Econet Global taking over the unsubscribed shares.

FML to acquire Nicoz Diamond

Early this month, First Mutual Holdings said it had received regulatory approval for the acquisition of short-term insurer NicozDiamond. It said the National Social Security Authority (NSSA) had transferred 300 263 184 NicozDiamond shares constituting 50,89%. NSSA has also undertaken to transfer 30,3% held by Zimre Holdings Limited to First Mutual. First Mutual will make an offer to the NicozDiamond minorities for the remaining 19,8% shareholding. FMH’s acquisition of NicozDiamond is financed by the $17,2 million the financial services group raised through a rights offer.


CFI soap opera

CFI Holdings was in the news for the better part of the year as its two largest single shareholders, Stalap and Nicholas van Hoogstraten fought for control of the ZSE-listed entity. When Stalap made an offer to minorities after exceeding the mandatory 35% threshold, van Hoogstraten made a counter offer of $0,46 per share. Resultantly, the Stalap offer which opened on July 17 and closed on August 4, found no takers. Van Hoogstraten drew first blood.

In November, Stalap gave CFI 21 days to call for an extraordinary general meeting for the sacking of then deputy CFI chief executive officer Shingirai Chibanguza after he was allegedly involved in acts of misconduct after an audit at Farm & City had unearthed weak corporate governance and possible conflict of interest on the part of Chibanguza. Van Hoogstraten called for an EGM for the removal of CFI directors Ephraim Chawoneka and Douglas Mamvura on the basis that there were representing the interests of NSSA, which had already exited the group. Mamvura and Chawoneka quit the board ahead of the December 6 EGM. Van Hoogstraten 2, Stalap 0.

Another EGM was called for on December 13 to vote on whether or not Chibanguza and Hamish Rudland should remain on the board. Rudland resigned before the meeting while shareholders voted for Chibanguza to remain on the board:

another defeat for Stalap. This week, CFI appointed Chibanguza as acting group chief executive officer.

Lame duck regulator when CFI implodes

The CFI chaos exposed ZSE which failed to stamp its authority. When van Hoogstraten’s Messina made a counter offer on Stalap’s, the regulator said the offer was unsanctioned, full stop.

Delta enters Zambia

In October, the beverages maker announced plans to acquire a controlling shareholding in National Breweries Plc from AB InBev. The sorghum beer company is listed on the Lusaka Stock Exchange.

Simbisa London-bound

Last week, listed fast foods concern, Simbisa Brands Limited, said its board of directors had approved the application for a secondary listing of the company’s ordinary share capital on the London Stock Exchange’s Alternative Investment Market. The transaction requires approval from the central bank, other regulators and shareholders. The company said listing on AIM would help it access additional funding for expansion. Simbisa said it was also in negotiations for the acquisition of an international complimentary business.

Moving up the ladder

Barclays Bank Zimbabwe appointed Samuel Matsekete as managing director this month following the exit of George Guvamatanga. Guvamatanga left the bank following the acquisition of 43% shareholding by Malawian banking group, FMB Capital Holdings. Reuben Java assumed the reins as Fidelity Life Assurance chief executive officer with effect from October 1.

He was poached from Old Mutual. Business executive Noah Matimba was appointed board chairman of CBZ Holdings with effect from July 19. He replaced Elliot Mugamu, who left the financial services group following revelations that he had received executive perks from the group in addition to board fees. Bhekinkosi Nkomo was appointed RioZim Limited chief executive officer with effect from July 1. FML Properties (formerly Pearl Properties) appointed Christopher Kudakwashe Manyowa as managing director in March.

In March, Amalgamated Regional Trading appointed Milton Macheka as chief executive officer, replacing Tapiwa Murad Ameer who left the group to pursue other interests.

In April Alex Edgar Siyavora was appointed OK Zimbabwe chief executive officer following the retirement of long serving head Willard Zireva.

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