HARARE – The Zimbabwe Stock Exchange (ZSE)’s trading was dominated by transactions in telecommunications giant, Econet, as the stock contributed 22 percent to $16 million spent on the bourse last week.
Equities analysts at EFE Securities (EFE) said the trades — set to culminate in a debenture to equity conversion coupled with the unbundling of Cassava Smartech Zimbabwe Limited (Cassava) from the group — however, failed to save declining market activity on the bourse, which was 57,86 percent lower than prior week.
“Top capitalised stock Econet was the top riser of the week after a 17,29 percent surge which took it to $2,4995, having traded in intra-week high of $2,600, ahead of Cassava unbundling,” EFE said.
Econet is moving to unbundle its financial and insurance business, Cassava, and list it on the ZSE on December 11, 2018 as it seeks to tap into the country’s growing digital technology space.
The demerging of Cassava will remove 39 percent of the mobile phone operator’s revenue, according to its most recent accounts. The authorised share capital of Cassava will comprise 4,2 billion ordinary shares with a nominal value of $0,001 each and the issued share capital will comprise 3 679 300 707 ordinary shares with a nominal value of $0,001, as all the shares shall rank pari passu (equal) in all respects, according to Econet.
Demerging and listing of the technology company Cassava separately from Econet on the main bourse is expected to allow the group to focus on the growing digital service opportunities in Zimbabwe.
This growth will be focused on mobile and Internet penetration, infrastructure, group synergies, payment platform, and brand recognition and acceptance seen as conducive to future growth.
Following the demerger from Econet, Econet Global Limited, the international business of the group will become the majority shareholder in Cassava with a 35,01 percent, with Econet holding a 20 percent interest.
Meanwhile, the ZSE extended gains into the week under review as momentum from the prior week carried into the new week.
All four benchmark indices closed in the black with the best performance emerging in the heavy caps cluster to see the Top 10 index rally 8,31 percent and close the week at 177,95 points.
Anchored by the heavy cap gains, the All Share Index was up 6,43 percent at 169,39 points while, the Industrial Index surged 5,97 percent and settled at 569,25 points. The resources were similarly rising as the Index added 0,34 percent for the week and settled at 208,81 points.