HomeBusiness DigestKingdom: ZSE's comeback kid

Kingdom: ZSE’s comeback kid

Bernard Mpofu

WHAT a year it has been for Kingdom Financial Holdings (KFH).

Last year Kingdom was struggling and depositors seemed t

o shy away from its banking halls.

Some depositors had closed their accounts triggering speculation that the bank had been hit by capital flight. The financial results that followed thereafter were not pleasing.

Nigel Chanakira was forced to abandon his new base in South Africa to come back and revive the fortunes of the financial institution he had founded.

His return as group chief executive was meant to improve investor and depositor confidence in the bank but some investors in the market remained sceptical.

The fund-raising projects that followed seemed to confirm that the market was still not convinced.

Old Mutual which had 10% at that time refused to follow its rights and was eventually diluted to 1%. The rights issue almost failed.

Faced with a doubtful market Chanakira approached the central bank for permission to allow the three major shareholders to take up more shares.

The result was that Meikles came out of the rights issue with 33%, Chanakira 14% and Econet 33%.

“It was a terrible time for us,” said Chanakira in an interview with businessdigest recently.

The year 2007 brought with it a change of fortunes for Kingdom. The comeback was huge.

Its share price has grown by 3 333 233,33% since December 29, 2006 making it the best performing counter on the Zimbabwe Stock Exchange (ZSE).

The merger with Meikles and Tanganda capped a good year for Kingdom.

There were other companies that also had good fortunes on the market.

Circle Cement is in second place having grown by 2 465 653,42% during the period from December 29, 2006 to December 18, 2007.

Fidelity which opened the year as the cheapest share on the market at $2,90 put on 1 896 451,72%, making it the third best performing stock this year.

Farming implement manufacturer, Zimplow, is fourth with a growth of 1 366 566,67%. The Bulawayo-based company seems to have benefited from the farm mechanisation programme.

Investment company, TA completes the top five with a 1 176 370,59% rise during the same period.

Interestingly, there is no other bank among this year’s top ten performers on the market.

Barclays is at 11th position having grown 743 489,74% during the same period.

Even though the market boomed since December 29, there were some companies that were not so fortunate.

Their share prices might have jumped a hundred thousand times but they still lagged behind the market in terms of growth.

As of December 18, only 37 of the 73 companies that traded on the Industrial Index this year had performed above the market.

The Industrial Index grew by 243 749,9% during the same period.

The phenomenal growth of the shares on the market is however clearly shown by the fact that 65 companies on the Industrial Index increased their prices by six digit figures.

Three of the five mining companies performed above the Mining Index which grew by 315 221.1%. Falcon led the way with 857 042,86% with Hwange second at 733 233,33% while Bindura was third with a growth of 374 093,55%.

Halogen made a huge come back over the past four weeks but ended the year below the Mining Index at 312 400%. It is now the most expensive share on the market at $50 million.

Rio Tinto was the worst performing mining counter with a growth of 162 400%.

So strong was the bull-run on the market that even the threat by the government to crackdown on the listed companies did not deter the rise.

Econet which was the star last year is a distant 49 on the Industrial Index having increased by 166 566,67%.

PPC which was the most expensive share on the market last year at $200 000 was the third worst performing counter this year growing by 14 400%.

The worst performing companies were this year’s new comers on the market, Pearl Properties (4 661,90%) and ZPI (2 900%).

Pearl and ZPI’s shareholders can have comfort in the fact that they were not really the worst losers because at least they got some value.

David Whitehead and TZI shareholders got nothing because their companies remained suspended. As for the shareholders of Barbican and Trust trouble continued as the companies remained suspended.

Analysts said the recent trend on the market was driven mainly by the Basic Commodity Supply Side Intervention (Bacossi) as companies diverted the cheap fund from the facility to the stock market.

Analysts who spoke to businessdigest said this year witnessed a significant change in the profile of investors on the market.

Individuals and other companies previously not engaged in stock market investments started dealing in shares.

“More and more individuals became knowledgeable to the fact that the stock market was a prudent investor unlike in previous years where our traditional clients constituted pension funds and other wealthy individuals,” said an asset manager with a local firm.

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