The Sunday Mail
Enacy Mapakame
Business Reporter
OLD Mutual Zimbabwe’s share price has soared more than 16 percent in March in a predominantly bearish market as investors cheer the group’s performance.
The company announced on March 15 that it will be paying a dividend of USc8,9 per share for financial year 2015, translating to US$4,9 million for shareholders.
Earlier in March, Old Mutual Plc, the London-based parent company, indicated the group would split into four units by 2018.
Investors also reacted to the relaxation of the fungibility limits by the Reserve Bank of Zimbabwe last month to 49 percent from 40 percent.
By close of trade Tuesday, Old Mutual Zimbabwe shares were up six percent at USc208 since the dividend announcement.
The stock has rallied 15,5 percent this month alone, rising faster than the industrial index’s 0,4 percent increase in March.
Year-to-date, Old Mutual Zimbabwe is up 2,3 percent, but remains some way off from its 52-week high of USc280.
For the full year to December 31, 2015, Old Mutual Plc reported pre-tax operating profit climbed 11 percent to 1,8 billion British pounds. Earnings per share rose 15 percent USc26,4.
The performance of subsidiary Central African Building Society was particularly outstanding, Old Mutual Plc said.
The building society’s net interest income also rose 39 percent to US$60 million while the loan book soared 27 percent to US$562 million.
Old Mutual Plc announced on March 7 the group would split into Old Mutual Emerging Markets, Old Mutual Wealth, Nedbank and Old Mutual Asset Management as part of strategies to unlock value.
In a statement, Old Mutual Plc chief executive Mr Bruce Hemphill said: “These businesses are performing strongly, have excellent competitive positions in sizeable markets and the underlying growth potential to flourish independently.
“Our new strategy will allow each business to have simpler access to capital markets to fund its growth more easily and be valued more appropriately, with more straight forward regulatory arrangements.”
Some private equity firms have since begun positioning themselves to take over Old Mutual Wealth, with bids of 9 billion pounds reportedly tabled, according to a Reuters report on March 8.
Last month, central bank chief Dr John Mangudya announced in his 2016 Monetary Policy Statement that full fungibility for selected counters was increased to 49 percent from 40 percent.
Old Mutual Zimbabwe’s share price responded by climbing seven percent to USc179.
A fungible stock is one whose shares can be traded in two or more stock exchanges in different countries.
Old Mutual is listed on Zimbabwe Stock Exchange, JSE Securities Exchange and the London Stock Exchange, and is tradable and convertible across the jurisdictions.
