Foreign investors dominate sales on ZSE

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FOREIGN investors were net sellers of $4,4 million shares on the Zimbabwe Stock Exchange (ZSE) in August, according to figures released by the local bourse this week.
Foreign purchases accounted for $12,5 million shares during the month under review while sales amounted to $16,9 million.
Regional seed producer Seed Co dominated the net sellers, with shares worth $5 million, followed by Delta, which accounted for $3,157 million.
Seed Co recently got shareholder approval to partially unbundle through a private placement to raise $19 million that would see a separate listing of the group’s regional operations, as part of measures to fortify investments and explore expansion opportunities.
Foreigners are selling more Seed Co shares at a time the company said it would approach international financiers to seek about $10 million additional capital for expansion.
Morgan Nzwere, Seed Co’s chief executive, told The Financial Gazette last month that the group needed around $30 million for expansion.
The transaction is meant to mobilise capital, protect the investment already deployed in the region and fund other expansion opportunities through a structure that will also unlock and preserve shareholder value while providing direct geographical portfolio choice for investors.
During the same month, Delta Corporation, the country’s second largest company by market capitalisation, said it would continuously engage government and the financial sector to find ways of addressing foreign currency shortages.
Pearson Gowero, the beverage brewer’s chief executive, told shareholders at the company’s annual general meeting in August that the group requires at least $2 million in foreign currency weekly.
“You also know that our offshore creditors have suspended our credit lines so any raw materials we are bringing into the country are on a cash basis. The RBZ and commercial banks have given us that lifeline that has allowed us to bring these products into the country,” he said, adding hard cash shortages were disrupting the group’s production cycles, but engagements with the financial sector were paying off.
“For sorghum beer, we have had normal growth in Chibuku Super, but we have constraints with respect to packaging. You may or may not be aware that the packaging of Super, which is PET, is imported. But I’m pleased to say in the last six to eight weeks, we seem to have resolved the issue and we hope that going into the future we will be able to adequately supply Chibuku Super,” he said.
The Delta boss said although demand for soft drinks remains firm, foreign currency is a major constraint.
“To date, we have been able to sell just about everything that we have produced. We have had disruptions due to inability to access raw materials as you know that the concentrates supplied by the Coca-Cola Company are the main ingredients in the production of soft drinks. These concentrates require hard currency.”
Gowero said Delta is still in discussions with the Coca-Cola Company after the latter advised of its intention to terminate the bottlers agreement with the group.
Delta plans to invest $50 million in plant and equipment for the next five years to boost production.
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