ECONET WIRELESS SHARES TUMBLE BY 40 PERCENT ON NEWS OF NIGERIA BATTLE
Econet Holdings Limited’s shares have lost 40 percent of their value over the past few weeks. An analysis on the counter showed that the share tumbled by almost 45 percent to Z$43 on Tuesday this week from Z$62.
It has taken a nosedive since the beginning of last month from Z$74 to its current price, which analysts attributed to the developments at the group’s foreign subsidiaries.
Directors of Econet Wireless Nigeria, which is part of Econet Wireless International headed by Mr Strive Masiyiwa, unanimously gave Econet rival, Vodacom of South Africa, the right to acquire the majority scrip in EWN.
The EWN board recently accepted about US$600 million offer by Vodacom Group Limited of South Africa, to acquire controlling shares in the Telecommunications Company.
The mobile cellular operator also witnessed its shares easing by Z$3 to Z$42 barely minutes after the group listed an additional 999 000 shares on the Zimbabwe Stock Exchange early this month. However, stock market analysts have maintained that the counter was still a good buy. "Current trends on the counter are a mere reflection of negative sentiments by some investors.
"The downgrading appears to be based on sentiment rather than fundamentals and one has to acknowledge that the Zimbabwe dollar tariffs are quite low compared to regional telecoms operators.
"We see activity on the counter picking up and we advise serious investors to buy," said an analyst with a local stockbroking firm.
Meanwhile, the analyst has dismissed as short-lived the recovery on the equities market that has been retreating for the past month.
"The current gains on the stock market are not a true reflection of the direction it will take in the fourth quarter.
"The recovery will be short-lived as it has only been buoyed by companies that are to release their year-end results over the next two months.
"The announcement of the national budget by the Minister of Finance and Economic Development next month would largely determine the course of the market.
"We might be in for a further slip of the stock market," he said.
The industrial index last week closed at 607 915,58 points and has continued to register gains, adding 9 496,14 points on Monday with a further 3,9 percent (24 096,89 points) rise on Tuesday to close at 641 508,61 points.