Though the country in the last two months of 2017 was embroiled in political logjam leading to an eventual change in governance, the Zimbabwean stock market led all others in Africa in the out gone year, 2017 with an annual growth of 129.12%. To generate this phenomenal performance, the ZSE Industrial had opened the year in review on January 02, 2017 at 145.35 and closed on December 29, 2017 at 333.02. Specifically, the ZSE Industrial began a descent on November 06, 2017 at 531.55 or a Year-To-Date growth up until then, of 265.70%. From November 06 however till December 29 when the market officially closed for the year, it was a loss of 37.35%. A minor recovery was observed between November 20 and November 27 of the year. This was not sustained as the index nosedived. The last trading day of the year was however positive. So far in 2018, the ZSE Industrial had generated a loss of 5.08% as the ZSE Industrial closed Friday January 12, 2018 at 316.10.
Major obstacles with the Zimbabwean market which may see the major index further down is currency exchange rates and accessibility to foreign currency hence, foreign investors currency shy away from the economy and in effect, its equities market. Technically speaking, assessing the American dollars as basis of exchange Zimbabwe is difficult as the new government takes it time to fix the battered economy.
Performance of GSE- Composite index of the Ghanaian Stock Exchange on graph for 2017 is almost straight which infers that the Ghanaian stock market for the better part of 2017 was consistent in growth. It was in the year, one of such. This apparently was a reflection of enhanced government policies and activities at boosting economic activities in the country. Consequently, the nation’s economy recovered, evidenced in foreign reserve growth, stable currency against international counterparts and other major indicators.
Significantly, GSE-Composite was the best in performance in 2017. So far in 2018, the Ghanaian market has generated 5.66% as it closed at 2,725.84 on Friday January 12, 2018. At that, it is only second to the Nigerian stock market in performance in the new year.
Generally, of the seventeen African stock markets covered, only three, namely MASI in Morocco, BSE Domestic Company in Botswana and BRVM-Composite in Cote D’Ivore lost points in 2017. The MASI in the year under review lost 1.14% though so far in 2018 had recorded a growth of 2.24%. It was a decline of 5.64% for the BSE Domestic Company in Botswana and 13.28% decline for the Ivorian BRVM-Composite.
Regulator scrutinises wild stock swings on JSE
South African regulators are scrutinising trades prompted by speculation that Viceroy Research will release a negative report about one of the country’s stocks, which caused some shares to crash more than 20%.
The Financial Services Board (FSB) is working with the Johannesburg Stock Exchange (JSE) to review trading activity and determine whether a formal probe is warranted, Tembisa Marele, a spokesperson for the Pretoria-based FSB has said.
The FSB’s mandate includes probing insider trading, price manipulation and false reporting.
Shares of some of SA’s largest real estate investment trusts fell by a record last week Thursday as talk swirled that one of them will be targeted in Viceroy’s next research report.
Aspen Pharmacare, Africa’s biggest pharmaceutical company, plunged on January 9 amid rumours it is in Viceroy’s sights. The stock has since recovered all those losses after Aspen CEO Stephen Saad came out in defence of his company, saying its earnings are transparent.
Very little is known about Viceroy (which refers to itself as a US-based short-seller) or the people behind it, who describe themselves on their website as “a group of individuals who see the world differently”.
Viceroy gained attention in SA after releasing a report detailing some of Steinhoff International’s woes soon after the retailer said it was investigating accounting irregularities that caused most of its value to be wiped out. “Viceroy encourages people not to speculate on the identity of any companies we are researching and we advise caution in trading on gossip,” the company said in a statement, issued from a Gmail account. “Viceroy complies with the laws and does not release research or discuss our focus prior to publication.”
Maxcom On the Threshold of IPO:
A leading ICT integration firm in Tanzania, Maxcom Africa Limited, is currently in the final stages of preparing to submit its draft to the Capital Markets and Securities Authority (CMSA) for listing on the Dar es Salaam Stock Exchange (DSE). Mr Raphael Masumbuko – the chief executive officer of Zan Securities Limited, who are providing advisory services to Maxcom has said, stating that they were seriously considering February this year as the month in which to launch the company’s initial public offering (IPO).
According to him, “we’re considering February as the right time to open the IPO because the economy of the country (Tanzania) will be stable –and members of the public would have already finished dealing with their January financial obligations,” he said, referring to the myriad expenses that are usually associated with the month of January such as rent, school fees, etc.
“Although it’s not mandatory for Maxcom to launch an IPO, we nonetheless consider February to be the perfect time in which to start an IPO. We expect the company to be listed on the local bourse (DSE) by February or March this year,” the Zan Securities chief stated.
Mr Masumbuko further explained that, apart from Maxcom, several companies have shown interest in listing on the DSE. However, he would not divulge their names or other details, ostensibly because “they were not yet ready for that kind of publicity.”
Currently, Maxcom operates in six African countries, namely Tanzania – which hosts the firm’s headquarters – Rwanda, Kenya, Uganda, Zambia and Burundi.
The firm’s board chairman, Prof Samwel Wangwe of Tanzania, recently said that the listing would enable the company to freely operate in compliance with the country’s laws and regulations.
According to the chairman, the application to go public was aimed at conforming with Tanzania’s Electronic and Postal Communication Act of 2010, and the Finance Act (2016), which requires communications operators to offload a minimum of 25 per cent of their shares on the general public.
Meanwhile, early in 2018, the Bank of Tanzania (BoT) moved to shut five non-performing lenders down in a bid to protect the stability of the neighbouring country’s banking system.
A statement released by BoT revealed the affected banks as Covenant Bank For Women Limited, Efatha Bank Limited, Njombe Community Bank Limited, Kagera Farmers’ Cooperative Bank Limited and Meru Community Bank Limited.
“The decision has been made after BoT learnt that the banks have inadequate capital, which is contrary to the Banks and Financial institutions Act of 2006 and its regulations,” the statement from the country’s central bank says.
New government seeks to sell stakes in state-owned companies
Zimbabwe has invited bids for stakes in up to eight loss-making state-owned enterprises, including its national airline and power utility, to help plug a ballooning budget deficit, its deputy finance minister said on Wednesday.
President Emmerson Mnangagwa, who took over from Robert Mugabe two months ago, is under pressure to deliver on his promises to ease spending pressures on the budget and revitalise the economy, which collapsed especially after violent and chaotic seizures of white-owned commercial farms in early 2000s.
Zimbabwe’s budget deficit hit $1.82 billion or 11.2 percent of GDP in 2017 from an initial target of $400 million, while its economy hardly grew in 2016.
Over the last four years, Zimbabwe has failed to cut its deficit despite promises to do so, mainly due to high government spending on public sector salaries, which accounted for more than 90 percent of the 2016 budget.
“We are diluting our shareholding in those entities and our shareholding might go to zero percent in some entities,” Terence Mukupe told Reuters.
Zimbabwe either partly or wholly owns 92 companies, most of which have been making losses for years due to mismanagement, high operating costs and old equipment. In 2016, 38 such parastatals ran losses totalling $270 million, according to a report from the president and cabinet office last October.
National airline Air Zimbabwe, which runs four aircraft, is sitting on a more than $300 million debt pile while railway operator National Railways of Zimbabwe recently received a $400 million recapitulation from South Africa’s Transnet.
Power utility Zesa Holdings has struggled since 2000 to generate enough electricity to meet demand and power outages have hurt businesses in recent years, according to the Confederation of Zimbabwe Industries (CZI).
In 2016, Zesa suffered a $224 million loss due to higher electricity import costs and because it is selling power at below cost.
Zimbabwe is also selling off its shareholdings in several other companies, including bankers, ZB Holdings and Agribank as well as insurer, Zimre Holdings, which has operations in several regional countries.