Zambeef share price in marginal drop

FMCG SUPPLIER NEWS

Daily-Mail.co.zm - Jul 10th, 08:55

Zambeef Products Plc share price on the Lusaka Stock Exchange (LuSE) has declined by two percent over the last few weeks following reports of alleged importation of contaminated beef, Stock Broker Zambia Limited (SBZL) has said. 

But, the broker expects Zambeef, which is dual-listed on LuSE and London’s Alternative Investment Market, to remain one of the most liquid stocks on the market because they are free- float [shares owed by public investors].

SBZL company managing director, Charles Mate, said the firm has seen the share price drop slightly by two percent from 4.65 when the announcement was made to 4.45 as at July 8, 2013.

“The firm’s closing price stood at 4.65 as June 1, 2013 when the announcement was made. In case of Zambeef, it is good to note that our market is exhibiting some signs of efficiency… [to] respond to changes.

We have seen that the price has gone down slightly by two percent or so from 4.54 the last two weeks to 4.45 percent,” he said.

Mr Mate said this in an interview in Lusaka yesterday. He attributed the reduction to negative information about the firm on the market.

“The issue here is that there have been comments in the press regarding Zambeef and the issues of aromatic aldehydes and we need to put this in the context of markets,” he said.

He said markets respond to positive or negative information, which is one way in which efficiency of the share price could be determined.

He said one way of measuring market efficiency is to look at whether the share price has moved upwards or downwards in response to new developments.“Markets are supposed to respond to information and give you some sense that the market is efficient or working,” he said.

Meanwhile, Mr Mate said historically, the firm has performed well and has been one of the most liquid stocks on the market.

“We expect that it will continue to be one of the most liquid stocks on the market because it has one of the largest free-float, which is a positive position,” he said.

Zambeef is one of the oldest listed entities with a market capitalisation of over US$70 million and is on record of slaughtering 60,000 cattle per year. It also produces eight million litres of milk, 3.5 million chickens, 20 million eggs, 120 million tonnes of feed and 90,000 hides per year.

The firm operates over 80 retail butcheries and the in-store meat departments of the Shoprite supermarket chain. Its brands include: Zambeef, Zamchick, Zamchick Egg, Zamchick Inns, ZamMilk, Zamsip, Zamleather Limited and Zamshu.
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