THE Government will offload more than 44 million of its shares in the ZCCM Investment Holding (IH) to the members of the public through the Lusaka Stock Exchange (LuSE).
Following the first article on Government’s imminent floating of the 27 per cent of its shares to the public, readers have been writing and calling in to find out more.
For instance, Mr John Misumbi wrote to me from the Copperbelt Province on October 29 2014 saying:
“How does someone like me purchase or acquire shares in a listed company like ZCCM-HI or any other company?”?Others have, equally, called to enquire more about the issue.
To respond to these readers and other followers, I decided to come up with another article on the matter for some more information.
According to Finance Minister, Alexander Chikwanda, this year’s trading activity on the LuSE has increased, reflecting improved investor sentiment and participation on the local bourse.
He said in the proposed 2015 National Budget that market capitalisation increased by eight per cent to K62.9 billion, while the All-Share index rose by 17 per cent to 6,620.9 by end-September 2014.?LuSE listing regulations stipulate that no single shareholder should control more than 75 per cent of the equity in any company.
This is to ensure that more of the citizens take part in the capital markets in the country.?Consequently, Mr Chikwanda directed the Securities and Exchange commission to ensure that all listed companies comply with this requirement.
On its part – to comply with the listing requirements – the Government has resolved to reduce its shareholding in ZCCM-IH to 60 per cent from the current 87.5 per cent.
Hence the 27.5- per cent shares will be sold to Zambian citizens as a way of entrenching economic independence of the people.
That decision followed a debt settlement agreement between the Government and ZCCM-IH signed on March 25 2014 in which ZCCM-IH’s net indebtedness of K1,829, 298,173.06 to the Government was converted into equity.
This satisfied the issuance and subscription for the 87.5 per cent of the new rights offer shares by the Government.
To adeptly handle the questions which I have been receiving from the readers, I sought the expertise of the LuSE and the Stockbroker Zambia (SBZ) on the matter.?My research findings from the two entities show that ZCCM-HI’s total shares are about 160.8 million and the 27.5 per cent which the Government intends to offload to the public through LuSE translates into 44, 252,238 shares.
But to fully appreciate the interest the issue has raised one has to look at how the ZCCM-IH has been performing on the LuSE since inception.?SBZ indicates that the ZCCM IH has performed extremely well in 2014 with a year to date gain of 134 per cent.
Since January 2011 the share has gained more than 300 per cent.?Members of the public who are willing and able to purchase ZCCM-IH shares, even before the floatation of the additional 27.5 per cent, are at liberty to approach the nearest broker on how to purchase these shares.
Apart from the pending 27.5 per cent shares which will be floated by the government to the Zambian citizens, currently ZCCM-IH has a LuSE free-float of 12.5 per cent.
The 12.5 per cent shares follow the raising of fresh capital on the 12.5 per cent portion of the rights offer, for shares owned by the minority shareholders, which was underwritten by the National Pension Scheme Authority (NAPSA) on a claw-back basis.
Therefore, the ZCCM IH shares will not only be limited to the 27.52 per cent but will be about 40 per cent.
Like already indicated, once the 27-per cent shares are floated on the local bourse the citizens can participate by visiting any of the LuSE brokers to open up a brokerage account and purchase the shares.
The broker will advise on any further requirements but it suffices to state that all Zambian citizens are most likely to be given first priority while a few foreign investors may also acquire some stake in the investment holding firm.
“This is just indicative and not set in stone.  ZCCM-IH is still going through its internal processes to finalise how best they can offer these 27 per cent shares to investors,” says SBZ in a response to my query.
Another critical question is that of the minimum amount which one may require to participate in this and any other share acquisition.
To open a brokerage account one requires a minimum amount of K256, which means that the initial investment is likely not to go below that amount.
It could be of interest to the readers and other members of the public to note that anyone willing to purchase the ZCCM-IH shares, even before the floatation of the additional 27 per cent, is free to visit the nearest broker on how to purchase the shares.
As already stated, currently, the ZCCM-IH has a LuSE free-float of 12.5 per cent, so the shares will not be limited to the 27.5 per cent.?For comments call: 260 0955 431442, 0977 246099, 0964 742506 or email:?jmuyanwa@gmail.com.