Warren Meares, Simbisa Brands‘ managing director has said the withdrawal of the firm from the Zimbabwe Stock Exchange (ZSE) was triggered by the depreciation of the Zimbabwe dollar.
Simbisa Brands, a fast food outlet company in Africa with its roots in Zimbabwe, recently issued a cautionary statement announcing that it was rather planning to list on the Victoria Falls Stock Exchange (VFEX), a ZSE US dollar-denominated subsidiary.
The ZSE is Zimbabwe dollar-indexed and billions traded there are tough to make out due to the currency’s protracted depreciation.
Markets have also been frustrated by bears that have characterised the ZSE for most of this year, amid investor flight.
Speaking to NewsDay Business in an exclusive interview, Meares said:
We have got investors from all over who are looking to invest in Simbisa.
There has been a lot of interest for years so moving to VFEX will help them to understand the business a lot better.
If you look at Simbisa’s almost 600 outlets, over 300 of that is in foreign countries.
The other eight countries we operate in have almost 250 stores now. These countries are all trading in solid currencies, stable currencies. As a business, we decided that it makes business sense to talk to investors in foreign countries like Kenya and UK (United Kingdom) and show them an income statement in United States dollars and show them projections of where the company is going in forex.
All the other eight countries are significant forex contributors to the income statements of Simbisa. So, our move is to allow our investors to plan better and understand our business better in a stable hard currency.
Since 2015, the ZSE has lacked foreign direct investment.
Really makes sense. But the Mutsvangwas will think it’s sabotage!!
The Simbisa CEO is misinforming the public. In Kenya the trading currency is the Kenyan shilling. There is no hard currency trading there. Your org is lucky that in Zim you trade in forex as if you are an exporter, fishing overpriced US$ from a pond. You have not been subjected to forex retention for your portion of forex sales. You should. Shareholders must open their eyes wide in this transaction. Ensure the nunber of shares you hold wont change because of the change of listing. Shares are not money , they are a unit of ownership and that unit does not change because the company has changed listing .
These are companies to watch very closely. Their appetite for externalization is high. They also tend to find favor with authorities making it easy for them to bulldoze authorities for what they want done.