Econet share price to triple this year
Securities firm Morgan & Co expects Econet Wireless Zimbabwe share price to nearly
triple from the current US$0.10 to US$0.30 per share this year on the back of increased
foreign currency revenue flows.
Econet shares traded at an average of $100 (approximately US$0.10) per share
throughout 2022. However, the company’s shares closed on Monday at $136.00 per share
on the Zimbabwe Stock Exchange (ZSE), recording a 0.3 percent drop from its previous
closing price of $136.4752.
The listed telecommunications and technology firm began the year with a share price of
$96.2759 and has since gained 41.3 percent on that price valuation, ranking it seventh on
the ZSE in terms of year-to-date performance.
Market analysts believe the company’s shareholders have reasons to be optimistic
knowing the stock has accrued an outstanding 81 percent increase over the past fourweek period alone — the second best on ZSE.
“The lagged tariffs reviews have dampened the recovery of the TMT sector in 2022 visa-vis resurgent inflation in the first half of the year. The sub-inflationary tariff
adjustments will further compound Econet’s limited top growth in real dollars,” said
Morgan & Co in a research brief.
“However, Econet remains resilient on the back of growing USD sales (25 percent of total
revenue).”
The equities research firm noted that while resurgent power cuts are affecting operations
in the telecommunications industry, Econet’s increased USD inflows will ease investor
concerns over the nearing settlement of foreign currency denominated debentures and a
modest capital expenditure spell.
Econet issued debentures valued at US$73 million in January 2017 with a tenure of six
years and are maturing this year. The debentures form part of an earlier capital raise
programme by Econet where the company sought to mobilise US$128 million, nearly half
through debentures, needed to expunge the firm’s external debts.
The debts included a US$300 million syndicated loan secured after 2009 for network
expansion. Creditors included Ericson, Industrial Development Corporation of South
Africa, Afreximbank and China Development Bank.
Morgan & Co urged investors to hedge their funds against inflation by investing in the
liquid Econet stock.
“We maintain our buy recommendation on Econet with a revised FY23 target price of
US$0.3008,” added Morgan & Co.
Econet is the third most traded stock on the Zimbabwe Stock Exchange over the past
three months (Oct 21, 2022 – Jan 23, 2023). The company has traded a total volume of
48.8 million shares valued at $4.52 billion over the period, with an average of 774,467
traded shares per session.
A volume high of 5.89 million was achieved on January 18th, and a low of 2,000 on
November 29th, for the same period.-The Herald
