More companies to de-list as economy struggles – ZSE chief

via More companies to de-list as economy struggles – ZSE chief | The Source January 20, 2014

More companies are set to delist from the Zimbabwe Stock Exchange this year due to the harsh economic environment obtaining in the country, the ZSE chief executive has said.

“The economy is difficult so various parties will be looking at the value of whatever action they do,” ZSE chief executive Alban Chirume told The Source in an interview recently.

“Tentatively, there are companies which have already shown that they might merge and there is a possibility of some de-listings.”

He said at least one company had indicated that it intends to de-list, although he declined to name the company.

“There are various negotiations taking place and we need to see how those negotiations will go,” he said, without giving a timeframe saying this would be announced by the company in question.

However, Chirume said the de-listings would not have any implications on the bourse as some of these counters were not trading.

The ZSE has 62 active counters, including four resources firms while seven are suspended.

Equities analyst Farai Murambiwa said small caps face a bleak 2014.

“Activity is likely to remain confined to the heavy caps as investors continue to exhibit fear and seek security in defensive counters. Penny stocks will be neglected even more and some will lose their listing status if the exchange does not come up with a second tier board,” Murambiwa said in his 2014 forecast.

“It is irrational to maintain a listing when your turnover is less than the annual listing fees.”

Meanwhile, the Industrial Index continued in the negative on Monday, shaving off 1.25 points to 201.48 points as a result of negative trades in heavyweight counters, Delta and Old Mutual.

Beverage giant, Delta lost 2.99 cents to end at 136 cents. Econet recovered from Friday’s losses to end the day 0.51 cents higher at 62.01 cents.

Turnover for the day was down 27.80 percent to $1.4 million compared to last Friday’s figure.

The mining index dropped by 0.45 points to 38.37 points on the back of negative trades in Bindura which traded 0.05 cents lower to 1.65 cents.

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