Nicoz to disappear from ZSE

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Mamvura’s Market Minute
When Nicoz disappears from the Zimbabwe Stock Exchange following the First Mutual Limited action, we will be down to 58 active companies and two suspended. Colcom too will be de-listed after its shares have been swapped for Innscor, which itself has been the largest creator of new listings on the ZSE over the past decade through the unbundling of Padenga, Simbisa and Axia.

Had this not happened, along with the creation of Proplastics from Masimba, we would — at just over 50 listed entities — have fewer companies on the ZSE than we had during the 1980s, a period which saw nearly a dozen de-listings.

The 1980s were also period of low growth on the ZSE, with only four companies coming to the market during the first decade of Independence. The lack of interest was largely due to the nationalisation of the foreign pool 1984, as all four listings came in the first two years of independence.

Over time it seems we have lost the reason for why the stock market is there — to raise money. There were recapitalisations in the post-Z$ period, but among the current crop of listed companies, half don’t need money while pouring fresh capital into the balance may not bring a decent return.

Of those companies that listed in the first decade after independence, only one company is still with us today — Truworths.

The retailer held its AGM last week at its headquarters at Prospect Park, a light industrial development constructed during the building boom of the late 1990s.

While F17 was a disastrous year, trading picked up in Q1 and has maintained its momentum into Q2. It’s very much the same story. Truworths don’t have the funds to pay a dividend and in the same breadth, do not need fresh capital as an expansion cannot be justified in this illiquid environment.

It would be nice to have some new stories. The only differences at the 60th meeting of the company were that perennial AGM attendee Job Matenda (pictured) did not apply to join the board this year and finance director Tinashe Chidovi is leaving for Canada. If we really were on edge of a new dawn, we would be told that the new finance director had just returned from the diaspora.

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