BancABC share unmoved by bank's performance

Published: 14 August 2013

DESPITE reporting strong interims for the period ending June 30 and bright future prospects, ABC Holdings' performance has not been reflected by the company's shares, analysts have said.

Analysts who spoke to this paper believe the financial group, with operations in Botswana, where it is primary listed, Tanzania, Zambia, Mozambique and Zimbabwe has demonstrated a sustainable level of profitability but its share value remains subdued.

The group is trading at 490 thebe on the Botswana Stock Exchange or price to book value ratio of 0,9 and US55c on the Zimbabwe Stock Exchange (price to net asset value ratio 0,5.) But analysts have given the company an out performing rating, setting a price of at least US130c per share. Shares on the local register peaked at US95c in December 2011.

"Ratings are undemanding at price to book value (ratio) of 0,5 against sub-Saharan Africa (excluding South Africa) peer average of 1,6," said Imara Securities in an advisory note to shareholders yesterday.

An Harare based stockbroker said the financial group has "generated a lot of positives" since the 2009, and has achieved an average 17,4 percent in attributable profit.

"If the bank is generating this kind of results and paying dividends, then it has to be certainly be one of the blue chips," said the stockbroker who spoke on condition of anonymity.

"Even under the difficult conditions, the bank has managed to raise US$50 million through a rights offer supported by its principal shareholder (African Development Corporation) and US$13 million from International Finance Corporation."

During the first half, ABCH reported 157 percent growth in attributable earnings to BWP 143 million pula (US$ 17,2 million compared with the same period last year.
- herald

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