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FML deal fails to rally insurer’s share price

HARARE — The decision by First Mutual (FML) Holdings Limited’s shareholders last Thursday to buy about 81% of NicozDiamond’s issued share capital provided the highlight of corporate activity on the Zimbabwe Stock Exchange in the week to Friday but failed to convince punters as its share price eased.

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FML is among the handful of counters whose share dropped during the week by 4,17% to 11,5 cents on Friday despite getting approval to acquire the NicozDiamond stake held by the state-run pension fund, National Social Security Authority (NSSA), in exchange for one FML share for every 5,02 NicozDiamond shares already held.

The shareholders also voted to approve a $17,25 million rights issue which will finance the acquisition of about 81% stake in Zimbabwe’s largest short-term insurer NicozDiamond, at an extraordinary general meeting (EGM) on Thursday.

Should the acquisition succeed, FML will merge its wholly-owned subsidiary, Tristar Insurance, with NicozDiamond, subject to regulatory approvals.

The deal is being driven by NSSA, which is the majority shareholder in both FML (50,95%) and NicozDiamond (50,89%) to consolidate its investments portfolio.

NSSA is the country’s biggest institutional investor with interests spanning across various sectors and upon completion of the transaction NSSA will have increased its stake in FML to 60,7%.

The Zimbabwe Stock Exchange advanced 7,17% to close the week at 238 points, driven by a rally in heavyweight counters.

The mining index gained 5,53% to close at 74,05 points on Friday.

Market capitalisation increased by 7,16% to $6,74 billion from $6,29 billion recorded in the previous week.

Total market turnover also increased by 13,33% to $3,82 million from $3,37 million  in the previous week.

Leading the gainers pack were Dairibord and Medtech whose share prices rose 29,11% and 25% to close at 11 cents and 0,05 cents respectively.

Zimre, OK Zimbabwe and Axia gained 14,29%, 8,08% and 6,67 to settle at 1,6 cents, 14,05 cents and 16 cents in that order.

Delta was up 6,78% to trade at 141,07 cents while Simbisa and Seedco gained 34,29% and 12,35%% to close at 47 cents and 174,15 cents respectively.

Padenga and Econet gained 12,18% and 7,96% to close at 44,87 cents and 48,85 cents respectively.

Innscor and Old Mutual picked up 3,29% and 1,79% to close at 78,5 cents and 411,25 cents in that order. Hippo also advanced 1,59% to settle at 1,815 cents in the week.

BAT and Natfoods were unchanged at 1,815 cents and 381,5 cents respectively.

Additionally, CFI and Mashonaland  advanced 5,53% and 5%to close at 68,75 cents and 2,31 cents while Afdis  and PPC added 3,08% and 2,75% to close at 67 cents and 73,21 cents respectively.

Partially offsetting the gains recorded by the industrial index were Edgars and Meikles whose share prices fell 10% and 6,67% to close at 4,5 cents and 21 cents respectively.
On the mining space Riozim advanced 7,88% to close at 65 cents while Bindura eased 2% to settle at 2,45 cents.

Falcon and Hwange were unchanged at 1,2 cent and 2,6 cents respectively.

Foreigners remained net sellers in the week, disposing of shares worth $1,8 million compared to buys of $143,414.

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