Royal Bank

Bindura losses drag mining index

THE local bourse opened marginally in the black, with the industrial index gaining 0,6% on Monday to close at 660 984,01 points while the mining index shed 0,6%, dragged down by losse

s in Bindura.


The market then went on to lose its marginal gains as both indices shed crucial points on Tuesday pulled down by losses in blue chips Meikles, Cottco and Delta.


Wednesday saw the mining index bouncing back by 3,6% to close at 150 904,96 points largely on the back of a massive 13% rise in Rio Tinto while the industrial index continued shedding crucial points, depressed by losses in bleeding blue chips.


BAT shot up a massive 40% on Thursday on the back of sensational results and gained another 56% on Friday to close the week 96% higher.


Local money market


Rates continued to firm on the local money market.


The local foreign currency market


The local currency traded unchanged on the official market, at $824: US$1.

The parallel market rates were ranging from $3 000 to $6 000:US$1


International markets


On the international arena the United States markets tumbled on the first day of the week as the US dollar took a knock after a call from the world’s richest nations for more flexible exchange rates across the globe.


While a weaker dollar would help the US manufacturing sector, the fear is foreign investors may take their money out of US assets thereby exposing the massive current account deficit.


As the week progressed, the greenback, gold and US markets continued to weaken with the currency hitting a three-year low against the yen, gold prices backtracking slightly before firming to US$384,85 and markets falling considerably with all the major indices ending in the red.


Company news


This was an eventful week for BAT which released a notice to shareholders advising of an Extraordinary General Meeting (EGM) to consider the proposed unbundling by BAT Zimbabwe of the entire shareholding in the wholly-owned subsidiary Valtobac Ltd Societe Anonyme registered in Luxembourg.


The company also proposed a resolution enabling it to purchase its own shares.


BAT went on to release exceptional results, to which the market responded immediately, pushing the share price up 96%


Econet published their results for the full year ended June 30.

Basic earnings per share rose 640% from $1,18 to $8,76 a notable increase considering the group has been unable to increase tariffs due to regulatory controls.


The group is lobbying for tariffs of US$0,20 per minute in line with regional tariffs.


At the moment Econet is only able to charge US$0,01 per minute. The group also sought to inform the market concerning the deal to purchase Mascom, Botswana’s premier mobile operator from Strive Masiyiwa’s holding company.


At an EGM held on Friday, shareholders approved the Mascom deal with the only amendment being the adjustment in the number of issued Class “A” ordinary shares from 918 705 438 to 739 843 680 shares.


As a result of this SMI and Dunstone will now own 60% of EWH shareholding, down from the proposed 64.1%.


Circle Cement released a great set of results for the half year to June highlighting a spectacular turnaround in fortunes for the company.


The company recorded earnings per share of $24,64 as compared to a $4,49 loss in the prior comparable period.


These results were spurred by the removal of cement from price-controlled items.


SeedCo produced an encouraging set of results for the half year to the end of August, recording an EPS of $22,46 an increase of 2 264% on the prior comparable period.


These results bode well for the future as the group normally does 80% of their business in their second half.


Mashonaland Holdings released an audited set of results for the nine months to the end of June, accompanied with the results was a note indicating that the statements appear for the purposes of a forthcoming transaction referred to in previous cautionary statements.


The group made an EPS of $5,74 for the period under review.

Zimnat released a notice to shareholders regarding the acquisition of the Botswana Insurance Company the market leader in the Botswana short-term insurance market.


Meanwhile, trading continued to be sluggish at the opening of this week.

The industrial index went up slightly to close at 651 206 points while the minings index remained stagnant at 153 432 points.


Among the top gainers was Clan which responded positively to the announcement of the proposed acquisition of Pioneer Transport and the appointment of two additional directors.


The group is also proposing a change in the name to Pioneer Corporation Africa Ltd to be approved at an EGM.


PG also rose as the group successfully acquired 70% of the issued share capital in Zimtile and the company’s net asset value has increased by $4,7 billion.


Sare released a set of satisfactory results achieving attributable profits of $802 million.


This resulted in a 1 216% increase in earnings per share to $6,57.

These earnings were mainly driven by investments income, which benefited from the bull run on the equities markets.

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