ENGINEERING listed group Zeco Holdings intends to embark on a share buy-back if the proposal is approved by shareholders.
The group said every 10 ordinary shares of $0,50 each will be consolidated into one of $0,50 each such that the six billion ordinary shares of the company are merged to 600 million shares. The buy-back awaits shareholder approval.
A share buy-back is the process by which a company reduces its capital by offering to purchase shares back from its shareholders.
A share buy-back is usually considered a sign that the companyâ€™s management is optimistic about the future and believes that the current share price is undervalued. Reasons for buy-backs include putting unused cash to use, raising earnings per share, increasing internal control of the company, and obtaining stock for employee stock option plans or pension plans.
As Zeco seeks a share buy-back, the industrial index maintains a bull run setting a new one day record at 554% on Tuesday beating its previous record of 552,79% set on October 23.
The mining index followed suit setting its own record after gaining 1,227% to beat its previous record of 420% set on October 24.
The bull run on the equities market has been powered by failure of the three main political parties to agree on cabinet posts, depreciation of the Zimbabwe dollar, high inflation and continued excess liquidity on the money market because of continued fiscal and quasi fiscal expenditures.
On Wednesday he key industrial index increased a marginal 17,54%, falling from peak gains of above 200%, to settle at 44,138,500,245,491,500.00 points.
The minings shed 17,03% to close at 22 627 785 590 870 650,00 points.
On the international markers, the euphoria about a fresh change in American political leadership after the election of the first African-American president Barack Obama was cruelly short lived as the reality set in of deteriorating market and economic conditions.
American stock indexes plummeted more than 5%, the largest decline on record for a day following the US presidential contest.
By Paul NyakazeyaÂ