adminafter buying an additional 11,7 percent stake from Innscor Africa in a special bargain deal.
Imara Edwards Securities brokered the special bargain, which saw about eight million shares changing hands at US146c, representing an 85 percent premium.
On the consummation of the deal, Natfoods was trading at US80c. One writer suggested that such a deal by a foreigner was a stamp of approval in the operations of Natfoods and the economy in general.
It also reflected undervaluation of stocks in general such that Tiger Brands could have seen a huge upside potential, hence buying at a premium.
It is not a secret that most stocks on the Zimbabwe Stock Exchange are undervalued, as evidenced by lower market capitalisation compared to numbers obtaining in some regional equities markets.
Market capitalisation – measured by multiplying the total number of issued shares by its price – is closely followed by investors to judge the performance of any bourse.
A fully informed investor, with a pocket full of cash and a firm understanding of the situation, can calmly stride into a turbulent market and buy into certain counters at a fraction or above their intrinsic value.
The Tiger Brands deal rightly gives a reflection of how the market is undercapitalised making it an ideal market for long term investors. Undervalued stocks represent opportunities for long-term investors.
Equities Market Review
Gains in heavy weight counters in Friday trades saw the industrial close the week in the positive after gaining 0,56 percent to 144.74 points.
Beverages group, Delta fuelled by positive expectations for interims due next week, added a further 2,04 percent to US75,2c. Econet, the country’s biggest cellular company recovered 1,37 percent to US370c.
OK, the largest grocery retailer advanced 3,3 percent at US9,5c. Innscor put on 1 percent to US53,01c on buying pressure while banking group Barclays recovered from Thursday’s losses to put on 4,2 percent to US5,21c.
Lightweight counters dominated the losers pack. The worst performing stock of the day was Astra, which eased 26,8 percent to US3c albeit on a paltry volume. AICO and Old Mutual, which pared 1c apiece, were the only heavy stocks to trade in the negative.
Radar was buyers at US16c after advising shareholders that the disposal of UBM to a management consortium is now at an advanced stage.
The mining index touched a 52-week low of 122,51 points easing 5,16 percent after coal miner Hwange lost 7,14 percent to US45,5c on selling pressure. The coal miner however closed buyers at 45c.
RioZim was bid at US50c with no trades. Concern is however growing among investors who hold equity in the resource firm on the implications of the plan of settling its US$53 million debt it owes various banks.
The strategy reportedly involves converting the debt into equity as well as generating fresh capital to finance key projects, which had been dormant.
Online Reporter