Cassava, Old Mutual dominate local bourse

FOREIGN investors were net buyers on the Zimbabwe Stock Exchange (ZSE) in June, purchasing shares worth of $6,5 million, with particular interest in Cassava SmarTech Zimbabwe (Cassava) and Old Mutual Zimbabwe (Old Mutual).
According to ZSE figures, foreign purchases accounted for $63,9 million worth of shares while sales amounted to $70,4 million during the month under review.
Of the $63,9 million shares bought, Cassava accounted for $12,9 million while Old Mutual recorded $10,1 million.
Other counters to record positive net buying were cement maker PPC at $3,5 million, Innscor Africa $2,6 million, Art Corporation $370 000, Masimba Holdings $350 000, Meikles $214 088, NMB $135 250 and Zimre Property Investment $79,3 million.
During the first half of the year, Cassava focused on introducing innovative products to customers, especially in digital payments, micro-insurance, short-term insurance, On-Demand services and healthtech services.
Cassava’s revenues nearly doubled to $501 million in the full year to February 28, 2019 up from $258 million
last year.
Even though the company was unable to comment on the numbers “because of the disparity between local and international experts on the appropriate accounting treatment of the effects of the change in functional currency”, analysts said the company was bound to thrive due to changes taking place in the business environment.
“Bottom-of-the-pyramid liquidity, substantially represented by small-holder farmers and artisanal gold miners’ earnings and the informal sector, rose to record levels in 2018,” advisory firm IH Securities said in a note recently.
Furthermore, transactional value processed on mobile money platforms surged by 85,7 percent and now constitute over 30 percent of transaction value processed in the entire National Payment System more than 80 percent of volumes. Hence, we anticipate a further significant rise in revenue of 141 percent in the Full Year 2019 to $621 million from $258 million recorded in 2018.
“Cassava’s low-cost, agent-based and highly digitalised business model has facilitated minimal operational overheads limited to technological infrastructure owned by Econet. We believe margins will improve going forward post FY19, with room to surpass comparable peers operating in the fin-tech industry,” IH Securities said.
The other counters to record positive net buying were First Mutual Holdings $49,873, Econet $32 769, Starafrica Corporation $19 500, ZB Financial Holdings $6 286 and Border Timbers $2 250.
Recently Old Mutual said its performance across its business remained resilient during the first quarter of 2019, and the group remains positive despite the economic challenges being currently experienced.
Isiah Mashinya, the institution’s chief operations officer, told shareholders at an annual general meeting that the diversified financial services group experienced a challenging trading environment during the first quarter.
“Performance across our core operations has remained resilient and after normalising for the impact of transitioning to the new currency regime, profits have remained in line with expectations. Expense growth was managed to levels below the year-on-year inflation numbers
for the rest of the first quarter,” he said.
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