Foreign investor buys 3,5pc in BancABC

of about five million shares worth US$4,1 million.
As a result, total turnover on the Zimbabwe Stock Exchange on the day improved significantly to US$5,3 million from US$705 303 recorded on Tuesday while the volume traded stood at 9 389 475 units.

The deal was executed at a stable price of US81c.
Foreign investors were net buyers with purchases in ABC, Inncsor, Delta and AICO amounting to US$4,2 million, representing 81 percent of total value traded against sales of US$436 953.
The ABC deal is one of the most significant on the market this year.

Foreign investors on the ZSE are reacting to the global liquidity crunch, resulting in portfolio managers withdrawing investments in risk markets.
This resulted in foreign investors, who dominated the ZSE, turning into net sellers.
Early in the year, foreign investors ADC Africa acquired 10 percent of ABC on the open market, after the investment group quit Premier Finance Group, now Ecobank. This latest deal comes after the banking group announced that it was considering engaging a third party through a private placement to raise an undisclosed amount of money.

Reporting its financials for six months ended June 30, 2011, BancABC said while capital adequacy was above the regulatory minimum in most subsidiaries, there is need for additional capital for the two entities.
The regional banking group is evaluating different options of raising new capital, including discussions with a third party, which if successful and subject to shareholders‘, approval, may result in a possible private placement.”

A private placement is a funding round of securities, which are sold without an initial public offering, usually to a small number of chosen private investors.
Given the geographical spread of ABC, the bank is likely to bring in a powerful regional or international partner, further strengthening its position both on the local and regional markets.
BancABC, listed as ABC on the ZSE and the Botswana Domestic Board, now has a balance sheet of US$1 billion, a “first” in the history of the company. ABC shares have gained significantly on the ZSE and have remained a buy.

Recently BancABC was the biggest bank on the ZSE by market capitalisation, overtaking foreign-owned Barclays Bank Zimbabwe.
The pan-African blue chip counter received the market’s cheer on the recent solid financial performance, recording the highest price of US85c.