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#Finance

Cassava SmartTech Listed On The Zimbabwe Stock Exchange

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The demerger process of Econet Wireless Zimbabwe and Cassava SmartTech is finally complete. Cassava SmartTech (CSZL) closed the day with a share price of $1.49 which is quite high once you consider that this is also challenging its ‘sister’ company and ZSE titan – Econet ($1.45).

A Timeline of the Econet and Cassava Demerger

For those wondering whether Cassava SmartTech will be able to walk on its own after separating from Econet Wireless Zimbabwe, those fears are quite unfounded once you consider that Cassava has Steward Bank and EcoCash under its patronage. These are huge companies that will continue making huge profits as long as our economy is driven by these digital transactions. In the short term these companies will be fine and if the economy did normalise reducing the profits of these two titans there are still some prominent pieces in the shape of Ecosure, EcoFarmer, Vaya not to forget Cassava Remit which was one of the existing Cassava stalwarts.

Does the higher share price really mean much?

Many of you will undoubtedly be trying to figure out whether Cassava SmartTech is really worth more than Econet on the ZSE and at the close of trading today the $1.45 closing price of EWZ puts Econet just 4 cents short of its counterpart.

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That’s a positive start for Cassava but there are many factors that affect stock markets and obsessing over share prices is not a favourite thing of mine. A perfect example (though not local) that shows the fickleness of the stock markets is Apple. A few months ago we (the media) were all obsessing over Apple being the first US company to reach the trillion dollar valuation and now they are valued in the $800-900 million range. Why did the value drop? Because projections of iPhone sales didn’t come back as expected. This simply goes to show that there are so many tiny details that don’t really reflect the state that a company is in but that will affect investors outlook and these influence pricing of shares.

Econet still has a media division that could end up raking in a lot and don’t forget; the fact that Cassava SmartTech businesses just contributed 39% of Econet’s revenue’s during the first half of the year which means they had 61% coming outside those businesses so Econet is still quite formidable.


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