CBZ Holdings new board chairperson Marc Holtzman says the company’s share price will, by full-year 2020, reflect normal business fundamentals but the financial services conglomerate needs help in convincing the investor Zimbabwe’s general macro-economic environment, businessdigest has learnt.
Zimbabwe’s largest bank by deposits and assets, CBZ, has always been cheap when compared to other banking and financial peers, and Holtzman says it is time investors realised the value of the stock as it mirrors opportunities.
Traditionally, such discounted valuations tend to attract value investors, those that tend to buy a stock because they believe its underlying value is not fully reflected in its present value hence they choose to hold a security until the value is realised.
This has been at the expense of being a huge turn off for investors on the local equities market for years.“I don’t need to sound like I don’t care because I do care about the share price but I’m not one of those people who wake up in the morning to check on the share price of the bank. I look at how we serve the clients, do we have the best technology?” Holtzman said. “Is our organisation and how we approach thing things the best? If you look at those things I will assure you that in a reasonable matter of time, half a year or year, the industrial price will reflect the fundamentals and, of course, here we need some help on how people see the macro environment here in Zimbabwe.
I think it will be a big mistake to run the business based on how the share price performs from day to day.”Holtzman said he would rather look at the performance of the stock on a year-on-year basis although he said it is going to take some time for the market to realise the value proposition in Zimbabwe.
CBZ, which began the year with a share price of ZW$0,6971 is currently trading at ZW$1,05 per share on the Zimbabwe Stock Exchange and has since gained 50,62% on that price valuation, ranking it 36th on the ZSE in terms of year-to-date performance.
“We are heavily discounted. But the discount doesn’t reflect CBZ but the people’s views of Zimbabwe in general. It’s just the macro yield of the market. I think people will come to realise there is tremendous hidden value here given the reforms that are taking place in the country. Zimbabwe today is very similar to Russia in 1992 when I first invested myself,” he said.
Meanwhile, Holtzman said the bank has a satisfactory liquidity and nostro position to date with the financial institution having extended over ZW$3 billion in loans to farmers that would have covered 210 000 hectares.
“That’s a huge sum. We are going to do more next year. Because even though we are the leader in agricultural lending, the whole banking sector in general is not supporting the sector enough. My vision is that we be the best financial institution in the country. That we financially reform the lives of the people of Zimbabwe in very positive ways and be as competitive as we can be and run as efficiently as possible. And also that we constantly remember that we have a mission to serve customs while accomplishing our goals,” he said.