Dual listing the way to go, says WH Ireland Securities

market and depressed performance of the Zimbabwe Stock Exchange.
In its “Emerging Companies Report” on LonZim, UK-based firm WH Ireland Securities notes, how the Zimbabwean investment company has benefited from its listing on the London’s Alternative Investment Market (AIM).
“LonZim’s listing on AIM has given it the advantage of mobilising the cash to retain key staff during the economic crisis and to support capital expenditure programmes such as the major refurbishment of the Leopard Rock Hotel.
“It also managed to recruit additional staff during the early stages of the economic recovery to secure first mover advantage,” said WH Ireland.
LonZim is an investment company with majority stakes in companies operating in Zimbabwe.
Its access to cash enables its local entities to be amongst the first to benefit as Zimbabwe recovers from the hyperinflationary period, which ended in February 2009.
In the prior fiscal year, the LonZim group revenues rose by 88 percent to £4,9 million.
The research firm has estimated that LonZim’s revenues rising by 49 percent to £7,3 million this year, then a further 57 percent to £11,4 million in the 2012 fiscal year.
“As the majority of the increase in cost-base occurred during the 2010 year, the strong revenue growth in the 2011 year is expected to result in the group approaching breakeven at an earnings before interest, taxes, depreciation and amortisation (EBITDA) level this year.
“It will generate an estimated £2,1 million PTP (before amortisation) in 2012,” said the securities firm.
WH Ireland says LonZim is still at an early stage of recovery and therefore is not expected to be generating a representative return on its investments until 2012.
Meanwhile, local firms that are listed on the AIM have benefited in terms of capital raising notably, Masawara’s Initial Public Offering on the London junior market, which raised US$25 million.
Minerals conglomerate Mwana Africa, which owns the Bindura Nickel Corporation and the Freda Rebecca Gold Mine in Zimbabwe, listed on the AIM in October 2005 and has undertaken a number of capital-raising initiatives on the bourse.
Besides the AIM, there are also a number of bourses that local firms can opt for both in the region and internationally.
DEAT Capital has earmarked an international road show slated for April 11 to 16, which will see local companies visiting a number of Asian countries. Among other gains, the trip is aimed at linking Zimbabwean businesses to listing opportunities in key Asian markets such as Hong Kong and Singapore.