[2007-10-30]  Cavmont Capital Bank to raise K18 bn. from LuSE
CAVIMONT Capital Bank plans to issue a Rights Offer on the Lusaka Stock Exchange (LuSE) to raise K18 billion for its expansion.

Stock Brokers Zambia, managing director, Charles Mate disclosed this in Lusaka last Friday at a Stanbic Bank workshop on empowerment held at Taj Pamodzi hotel.

A Rights Offer is made by a quoted company to its shareholders to enable them to buy new shares in the company at a discount to the market price.

Mr Mate said that to support LuSE’s capital formulation; it would be nice to get many commercial banks listed on the capital market.

“If all banks were listed on LuSE, it would increase level of returns and capital formulation,’’ he said.

He said from 1995 to-date, LuSE had seen a total transformation, pointing out that in the eight months of 2007, LuSE has experienced 4000 trades and year on year returns of 110 per cent in US dollars terms.

“There is no doubt that the Zambia Privatisation Trust Fund (ZPTF) has been successful in its role of empowering Zambians through share ownership in companies,’’ he said.

Mr Mate said the LuSE was formed by Government, as a direct product of transformation process of privatisation.

He said LuSE formation was driven by privatisation and the challenge then was how to bring companies to the stock exchange, and this was done by ZPTF through public offers.

He noted that during 1995, Zambia had high inflation levels; high interest rates and many Zambians could not afford to buy shares which in most cases led to under subscribing.

He said during the period, institutional investors played a key role of empowerment and developing the capital market.

He also noted that given that yields on Government Treasury Bills were about 60 percent then, it was difficult to find investors that were willing to invest on the capital market.

Mr Mate however stated that companies still had a challenge of were to source cheaper long term funding.

“To-date, we now have a market that is receptive to share ownership.

The market is over subscribed,’’ he said.

He added that the challenge faced by LuSE was to deepen the capital market so that more projects could be funded through the exchange.

He stated that there was need to find ways of supporting LuSE’s capital formulation, which was posing as a challenge.

Mr Mate however believed that through the Citizen Economic Empowerment, capital formulation programme could be tackled.




Source: © 2005 Zambia Daily Mail.