eBusiness Weekly
Mamvura’s Market Minute
The ZSE must be congratulated for instituting the All Share Index. A shake up of the indices has been needed almost since the point of dollarisation and this was long overdue. A bit of explanation as to how the Top Ten works would be welcome as usually reviews internationally are done on a quarterly basis.
This is because a 1 cent rise in OK Zimbabwe at current prices would kick Old Mutual out the top ten. For what its worth, let us take a look back to the first full quarter after dollarisation, the end of 2013 and December 2017 to see what companies were in the top ten and their market capitalisations.
Jun-09 $ mln Dec-13 $ mln Dec-17 $ mln
Delta 423.5 Delta 1 728 Delta 1 929
Innscor 378.7 Econet 987.5 Econet 1 481
Econet 282.3 Innscor 432.1 BAT 742.8
Barclays 257.9 BAT 247.6 Innscor 541.6
Hippo 256.7 OK Zimbabwe 230.9 Seedco 468.9
Kingdom Meikles 204.8 Seedco 175.4 Natfoods 444.6
TA Holdings 157.6 Hippo 173.8 Hippo 339.7
Lafarge 152.0 Old Mutual 139.6 Padenga 297.9
Seedco 133.8 ABC 137.4 Simbisa 254.6
RioZim 125.7 Natfoods 136.8 Old Mutual 245.9
Interesting is it not? Certainly value has been created by Innscor’s unbundlings, and four associated companies are now in the top ten. BAT’s presence remains the greatest surprise of all.
The other question international operators would ask about the indices is: Why now? Politically it is an excellent time to introduce a new index, but given the 60 percent premium on the parallel market for transfers, prices on the ZSE are not reflective of value.
Should the payment backlog be cleared and prices go back to reflecting PEs and not liquidity, the All Share Index will go on to languish in the sub-100 level for years to come . . . and that would not be reflective of the “new economic environment”.
Finally, Mamvura’s new year thoughts. Often he is asked about “low hanging fruit” — that is, things that are easily implementable and create immense goodwill with little investment or loss of revenue . . . successful execution of “low hanging fruit” unlocks a massive gain in the next 12 months. These are small gestures and decisions that say we are “open for business”. They create an impression that there is a new gig in town.
(1) Open Chancellor Avenue at night time — costs nothing.
(2) Abolish visas for Westerners — minimal loss in revenue for massive gain in goodwill.
(3) Drop Bureau Veritas — misguided idea of the old regime.
(4) Fix carousel and aircon at RGM International — $100 000 needed for this rather than a new airport.
(5) Abolish tollgates — what comes in does not justify the cost of this charade — put it in the fuel cost.
