Business / Companies
Strive Masiyiwa's Econet sheds $354 million in value
17 Jan 2016 at 04:15hrs | Views
TELECOMMUNICATIONS giant Econet Wireless Zimbabwe (EWZ) had $354 million of its value shaved off last year, tumbling from being second-biggest counter to the fourth largest by market capitalisation on the Zimbabwe Stock Exchange (ZSE).
Stocks have opened the new year in the red, extending losses from 2015.
EWZ paced decliners among blue chip counters in 2015, shedding 65 percent of its value to $190 million, as its shares fell to US21 cents from US60 cents in the 12-month period.
Revenues for the country's biggest telecommunications company by both subscribers and assets have been systematically declining in the last three years on falling voice and SMS revenues.
Econet profits for the first six months to August 31, 2015 tanked 47 percent to $23,8 million from $49,8 million a year earlier.
Total revenue fell 17,7 percent to $323 million from $392 million in the same period a year ago, weighed by a 35 percent tariff cut introduced by regulator Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz).
However, beverage maker Delta Corporation whose total market capitalisation dipped 33 percent from January 2015's opening value of $1,3 billion remains the biggest company on the exchange with a market value of $846 million.
BAT has since replaced Econet as the second-biggest company on the ZSE.Investors pushed the cigarette maker's market capitalisation 9 percent higher to $251,7 million from $231 million at the beginning of the year.
In the past 52 weeks, shares of BAT Ltd have risen 8 percent to $11,30 to become ZSE's most expensive stock.
Analysts say the profitability and revenues of consumer stocks has been affected by low consumer spending sparked by the challenging local economic environment.
But BAT bucked the downtrend and is presently rewarding investors with "good dividends".
With a market value of $196,3 million, seed manufacturer, Seed Co Ltd, now sits third on the stock market's hierarchy of top companies, displacing Innscor Africa Ltd, which is now valued at $130 million.
Last year, Seed Co Ltd's stock dropped 1,3 percent, but not as quickly as Innscor Africa Ltd's 56 percent plunge.
The industrial conglomerate is now the sixth-largest Zimbabwean company, as measured by market capitalisation.The decline in Innscor Africa Ltd's market value is partly explained by the unbundling and subsequent separate listing of fast foods subsidiary, Simbisa, experts say.Valued by the market at $86 million, Simbisa joins the ZSE blue chips at number nine ahead of sugar manufacturer Hippo Valley's $71 million market capitalisation.At this time last year, Hippo Valley was worth $106 million.
National Foods Ltd becomes the fifth-largest ZSE-listed firm with a market value of $179 million.
Insurance giant Old Mutual and banking group Barclays Bank Zimbabwe come in at seventh and eighth position respectively, and are valued at $108 million and $90 million correspondingly.The top 10 counters account for over of ZSE's total market value, currently hovering around $3 billion.Retailer OK Zimbabwe has bowed out of the stock market's elite companies after its market value plummeted 56 percent to $58,5 million from $132 million a year ago.
The bloodbath on the local bourse has continued from last year.
Trading has been predominantly thin and losses have widened.
Market watchers opine that a clear policy framework will help drive investor sentiments.
"The planned policy changes that are meant to improve the attractiveness of Zimbabwe as a destination for foreign direct investment remain a pipe dream without supportive legislative provisions and a clear policy framework," said EFE Securities last week.
By close of trade Tuesday, the mainstream industrial index was down 2,3 percent to 122,18 points since January 4.
The mining index has slumped 8 percent year-to-date to 21,82 points following losses in Bindura Nickel Corporation.Last year, industrials slumped 30 percent and minings tumbled 72 percent.Analysts expect the stock market woes to continue in 2016, worsened by the extended decline in global commodity prices.
Stocks have opened the new year in the red, extending losses from 2015.
EWZ paced decliners among blue chip counters in 2015, shedding 65 percent of its value to $190 million, as its shares fell to US21 cents from US60 cents in the 12-month period.
Revenues for the country's biggest telecommunications company by both subscribers and assets have been systematically declining in the last three years on falling voice and SMS revenues.
Econet profits for the first six months to August 31, 2015 tanked 47 percent to $23,8 million from $49,8 million a year earlier.
Total revenue fell 17,7 percent to $323 million from $392 million in the same period a year ago, weighed by a 35 percent tariff cut introduced by regulator Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz).
However, beverage maker Delta Corporation whose total market capitalisation dipped 33 percent from January 2015's opening value of $1,3 billion remains the biggest company on the exchange with a market value of $846 million.
BAT has since replaced Econet as the second-biggest company on the ZSE.Investors pushed the cigarette maker's market capitalisation 9 percent higher to $251,7 million from $231 million at the beginning of the year.
In the past 52 weeks, shares of BAT Ltd have risen 8 percent to $11,30 to become ZSE's most expensive stock.
Analysts say the profitability and revenues of consumer stocks has been affected by low consumer spending sparked by the challenging local economic environment.
But BAT bucked the downtrend and is presently rewarding investors with "good dividends".
Last year, Seed Co Ltd's stock dropped 1,3 percent, but not as quickly as Innscor Africa Ltd's 56 percent plunge.
The industrial conglomerate is now the sixth-largest Zimbabwean company, as measured by market capitalisation.The decline in Innscor Africa Ltd's market value is partly explained by the unbundling and subsequent separate listing of fast foods subsidiary, Simbisa, experts say.Valued by the market at $86 million, Simbisa joins the ZSE blue chips at number nine ahead of sugar manufacturer Hippo Valley's $71 million market capitalisation.At this time last year, Hippo Valley was worth $106 million.
National Foods Ltd becomes the fifth-largest ZSE-listed firm with a market value of $179 million.
Insurance giant Old Mutual and banking group Barclays Bank Zimbabwe come in at seventh and eighth position respectively, and are valued at $108 million and $90 million correspondingly.The top 10 counters account for over of ZSE's total market value, currently hovering around $3 billion.Retailer OK Zimbabwe has bowed out of the stock market's elite companies after its market value plummeted 56 percent to $58,5 million from $132 million a year ago.
The bloodbath on the local bourse has continued from last year.
Trading has been predominantly thin and losses have widened.
Market watchers opine that a clear policy framework will help drive investor sentiments.
"The planned policy changes that are meant to improve the attractiveness of Zimbabwe as a destination for foreign direct investment remain a pipe dream without supportive legislative provisions and a clear policy framework," said EFE Securities last week.
By close of trade Tuesday, the mainstream industrial index was down 2,3 percent to 122,18 points since January 4.
The mining index has slumped 8 percent year-to-date to 21,82 points following losses in Bindura Nickel Corporation.Last year, industrials slumped 30 percent and minings tumbled 72 percent.Analysts expect the stock market woes to continue in 2016, worsened by the extended decline in global commodity prices.
Source - sundaymail
