Published: 20 July 2017

BARCLAYS Bank of Zimbabwe's share price has risen 27 percent since the announcement of its imminent takeover by FMB Capital of Malawi.

Britain's Barclays Plc announced the sale of its Zimbabwe unit to FMB on May 30. In terms of the deal, FMB will acquire 41,2 percent of Barclays' Zimbabwe business, with an option to purchase an additional 10 percent which Barclays Plc will hold for three years.

The transaction now awaits regulatory assent in Zimbabwe, expected this quarter.

At the time of the deal, Barclays Bank of Zimbabwe was trading at 3,4 cents on the Zimbabwe Stock Exchange (ZSE).

The stock traded at 4,3 cent on Monday, 26,5 percent higher, with the market disregarding the early controversy which greeted the transaction's announcement.

The ZSE's five bank stocks grew by an average 13,1 percent over the period, while the broader market is 21 percent up since June 1. The market, which has rallied since the last quarter of 2016, advanced 36 percent in the first half of 2017 amid weakening money market rates and investor flight from the possible effects of bond notes.

Local ownership pressure groups and some Barclays Zimbabwe employees lobbied President Robert Mugabe and the central bank to withhold approval of the Barclays-FMB transaction, saying it went against the government's indigenisation policy.

Government has, however, not shown any inclination to torpedo the transaction, with central bank governor John Mangudya telling Parliament that the deal did not violate the local ownership law.

- fingaz

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