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BizDay Zimbabwe

Consumer-facing industries drive ZSE market cap


BARCLAYS Zimbabwe, a unit of United Kingdom-based Barclays PLC, has overtaken CBZ Holdings as the largest capitalised banking concern on the Zimbabwe Stock Exchange, as consumer-facing companies continue to drive ZSE market growth.

This has seen Barclays becoming the 10th largest capitalised company on the ZSE ahead of CBZ Holdings, which, however, remains the country’s largest bank group by assets and revenue.

Uncertainty surrounding the indigenisation and empowerment regulations compelling foreign-owned companies to sell controlling stakes that analysts say could have held back Barclays.

There have also been calls to list international banks such as Stanchart, Stanbic, Ecobank and MBCA — a unit of South Africa-headquartered Nedbank — on the local bourse.

Stanchart is listed in Botswana and Kenya while Standard (which operates as Stanbic) is listed in South Africa.

According to figures availed by the ZSE yesterday, the top 10 most capitalised firms on the local bourse include eight companies from consumer-facing industries and two from the financial services sector.

The companies that dominated the ZSE market capitalisation include Delta, OK Zimbabwe, Econet Wireless, Innscor Africa Limited, National Foods, Hippo Valley Estates, Seed Co, British American Tobacco, Old Mutual and Barclays.

Market capitalisation is a measurement of the size of a business enterprise (corporation) equal to the share price times the number of shares.

Leading the game is consumer beverages manufacturers, Delta with a value of $1,8 billion, followed by Econet-$636 million, Innscor-$534 million, OK Zimbabwe-$271 million, Hippo Valley-$212 million BAT-$185 million, NatFoods-$171 million, Seedco Limited-$167 million, Old Mutual-$131,8 million and Barclays Bank-$118 million.

In February this year Delta was valued at $1,3 billion.

Since the country dollarised in 2009, consumer-facing firms have been performing well compared to other sectors of the economy.

“This notion is premised on the view that companies that are in the business of selling basic goods and services are likely to have sustainable earnings that are of higher quality.

“This has been the case in Zimbabwe hence the interest in business with exposure to retail revenues,” MMC Capital said in a written response to NewsDay.

“Of late, we have noticed the resurgence of demand in the stock of Barclays probably on the back of the rumours in the market that the bank’s indigenisation proposal has been accepted by the government.

“Also there is a possibility that the challenges being experienced by the indigenous bank will benefit the foreign banks of which Barclays will likely be beneficiary.”

The ZSE’s total market capitalisation stood at $5,6 billion as of Wednesday this week despite the industrial index shedding 0,68 points to close at 219,45 points.

Counters that recorded losses on the day included Dairibord, Delta, Innscor, CBZ and PGI,
Colcom, Meikles, Fidelity Life and Seed Co recorded gains.

The mining index remained flat at 72,97 points with three mining companies Falgold, Hwange and RioZim at previous levels.

Finance minister Tendai Biti in his 2013 budget presentation said in 2012 the market capitalisation averaged $3,4 billion in 2012, but closed the year at $4 billion.

The ZSE reopened at a market capitalisation of $1,67 billion in 2009.
Report by Business Reporter – NewsDay