Econet share price tumbles

to find balance.

Other heavyweight counters Meikles Limited and hotel group African Sun Limited also lost ground in the 52 weeks to record lowest prices of US25,5c and US0,75c respectively.
Econet and Meikles were yesterday unchanged at previous prices as African Sun was bid at US0,80c.
Meikles failed to excite the market as it requires working capital of US$66 million of which a minimum of US$13 million will be direct to TM Supermarkets by Pick ‘n’ Pay.

The group is also looking to raise a further US$90 million for new projects and shareholders are not looking forward for a dividend given the capital pressures.
Losses in African Sun bring its year-to-date loss to 65,8 percent. Shareholders have lost a great deal of value in the hospitality group, which once hit an all-time high price of US20c. The counter was one of the worst performing stocks in 2010, losing 82 percent of its value.

Econet is one of the counters traded by foreign investors and the withdrawal of foreign investors on the ZSE has exposed the counter.
Foreign investors have remained net sellers on the exchange as well as Econet.
Analysts this week said there could be other issues affecting the share price that has been trading around US490c.

“It has always been difficult to predict the Econet share price as it can always pick up within a short period of time,” said one broker on the ZSE.
Another broker said: “It could be that the share price was not moving and investors thought there are other counters where they can put their money.”
The departure of foreign investors also had an impact on Delta, the biggest counter on ZSE based on market capitalisation.

The Econet share is the most liquid on the local bourse and it has continued to attract foreign investors.
The telecommunications giant has got 167 million shares in issue and an additional 79 million Class A shares, which traditionally belong to founding shareholders.

Econet valued just above US$800 million, is one of the biggest companies on the ZSE in terms of capitalisation as well as revenue.
Despite the sharp price fall, Econet’s investment case remains the most compelling on the local market on the back of their strong market leadership status and the fact that they seem well geared up to withstand any competition that may arise both from within and offshore.