ECONET Wireless Zimbabwe’s planned delisting from the Zimbabwe Stock Exchange (ZSE) is set to wipe more than US$700 million off the bourse, with analysts warning the move will remove one of its most liquid and widely held counters, further dampening investor confidence.
Econet yesterday announced plans to voluntarily delist from the ZSE, saying it was initiating corporate actions to correct what it described as a “grossly undervalued” share price, unlock shareholder value, improve access to capital and strengthen long-term competitiveness.
The transaction needs approval of shareholders at a yet-to-be-set date.
At the time of its initial announcement on December 3, Econet had a market capitalisation of US$628,31 million despite total assets valued at US$957,32 million as of August, highlighting the extent of the perceived undervaluation.
The announcement triggered renewed investor interest, pushing Econet’s market capitalisation to US$1,01 billion by December 9, briefly making it the ZSE’s largest listed company. However, the valuation later stabilised at US$739,28 million on Monday.
Following Econet’s exit, the ZSE’s total market capitalisation is expected to fall sharply in real terms to about US$2,35 billion, from over US$3 billion recorded on Monday.
