By Dr Lubinda Haabazoka
What is company listing?
Company listing is the process of issuing shares on the stock market. When a company lists on the stock market, it converts from being a limited company to a Public Limited Company. The process of listing involves courting two markets:
1. The Primary Market i.e the market for initial public offers (IPO). In most cases when shareholders allocate a certain percentage of shareholding for listing, they do not offload the shares directly to the public. Doing so can lead to negative consequences such as under subscription. Where there is under subscription, a company incurs losses due to costs related to the listing process. To hedge against demand risk (risk that shares won’t be bought), companies normally offload their allocated shares to institutional investors in a process known as underwriting. institutional investors include among others banks and other fund managers. The process of selling shares to institutional investors is known as initial public offer. Households have no access to this market. It is at this stage that the company listing gets its capital from listing and surrenders its shares.
2. The Secondary Market i.e the market for resale of shares. In most cases at this point, the shares now belong to institutional investors. When Institutional investors purchase all the shares, they now offload them on the secondary market such as the Lusaka Stock Exchange to households and other market participants. It is very difficult to know who will actually buy the shares because in most cases, institutional investors can be many and shares are offloaded to everyone with access to the stock market at the same time. The higher the demand, the higher the price. Institutional investors make profits during this stage. No one person can with 100% be certain to purchase all the shares on this market.
Why do companies list shares?
– To raise capital for capital projects
– A way of cashing on initial investments by venture capitalists etc.
The Case of Parastatal companies
Going public does have positive and negative effects:
Advantages
– Strengthens capital base,
– A way of attracting FDI and Technology,
– makes acquisitions of state owned companies easier by citizens because of affordable share prices,
– diversifies ownership,
– increases prestige,
– forces disclosure to the public making citizens aware on the performance of a particular company,
– Listing gives an opportunity to citizens to take part in the partial privatization unlike direct sales where citizens can be out done by foreign companies with huge resources.
Disadvantages
– Puts pressure on short-term growth,
– imposes more restrictions on management and on trading,
– makes former business owners lose some control of decision making depending on the percentage of shares offloaded.
Caution
– For ZAFFICO, it is important to grant a certain percentage to employees and Saw millers through some form of trust as in the case of ZANACO
-Strict monitoring to ensure that ZAFFICO continues to grow trees to avoid a desert in Zambia
Opportunity
Instead of politicking, Zambians should see this as an opportunity and prepare resources to purchase ZAFFICO shares. Shares are a form of savings for citizens. Looking at the rate at which the global construction sector is growing, we only expect ZAFFICO shares to boom especially if the diversified shareholding will enhance efficiency as in the case of Lafarge, ZANACO, Zambia sugar company and other similar companies.
I hope this will help bring the ZAFFICO debate back to objectivity.
This is dumb. Going IPO makes sense for a profitable or assuredly profitable organization with resource restraints. There is a reason going IPO we’re not the solutions for ZCBC, UBZ, NIEC, etc. Acknowledging that a company is failing (as explained by some minister), as the reason for going IPO makes no sense. They are making a political decision and selling it as a sound business decision. It does nothing to fix any of the internal factors that have the company heading to bankruptcy. These guys are being Coy about this for fear of acknowledging rampant malfecence. But time tells all. Cannot politicize out of reality for long.
Now go figure… the black sheep that gives away and the white sheep that uses its resources to better themselves…
Zambia are we being true to ourselves and our country? Are we confirming to ourselves that a black African is a BLACK sheep taking all the three bags full of wool and giving it away – One for the master, One for the dame and the other for the little boy who lives down the lane? We are taking away from ourselves and giving to the non blacks who know what to do with what we are giving them.
The ones we are giving are white sheep who take care of themselves and their people. They have confirmed to us that they are white sheep with three needles full. All of which is used to better their lives.
Baa, baa, black sheep, have you any wool?
Yes sir, yes sir, three bags full!
One for the master,
One for the dame,
And one for the little boy Who lives down the lane
Baa, baa, white sheep,
have you any wool?
yes sir, yes sir,
three needles full.
one to mend a jumper,
one to mend a frock,
and one for the little girl, with holes in her sock.
Zambia! Wake UP!!!!!
The problem is we think it is just ZAFFICO…
Where is ZAFFICO? On the Copperbelt, what is underneath?
Copper
Cobalt
Emeralds
etc etc
What else is there?
Mukula!!
Wake up!!!
Since Dr Haabazoka stated he didn’t want non-economists to comment on the Zambian economy and clearly am not one my comment is; there is a reason people turn off the lights to do “Ntwenokane” because that picture of him is nightmares galore!
Trusting PF00L thieves with sale of Zaffico is like you want to cross a river, then you ask a crocodile to ride on his back. Don’t be surprised when the croc says he’s hungry midway across.
– PF has cleverly sold DeadNBC to Chinese Star-times. All our TV license fees are now going to China to pay off debt for overpriced digital migration loan.
– PF has cleverly sold commercial part of Ratsa to Lebanese & Austrians. All our vehicle license fees, driver license fees, speed fines is going to lebanon (maybe even sponsoring Hezbollah) & Austria to repay loans for overpriced upgrades.
– Our toll gates money & money meant for drugs in hospitals is going to China to pay for over-priced loans for roads.
The issues is why sell ZAFFICO shares and to whom? ZAFFICO houses were sold to a Chinese Company and not Zambian sitting Tenants. Why? Its obvious having sold ZAFFICO Houses to the Chinese govt is selling the Company to the Chinese. The Chinese looted our Mukula Tree, ZAFFICO Houses and now ZAFFICO the Company itself. Thats why Residents are annoyed and rioted. The Chinese are looting the Mukula Tree, they have bought ZAFFICO Houses behind our backs and they are now buying ZAFFICO the Company. The next thing we will loose our jobs and livelihoods. Thats why we rioted.We fear for our Future and resent the Chinese Exploiters. Period.
This guy is a compromised PF cadre, I stopped reading his articles.
@Dr chona
Zaffic is a plantation ans not mining area.
Clearly stated. And shared holders will be told
Am a non partisan political consultant
Did you political arse l!cking !mbecile read what Dr. Chona say?
What it means: “..Where is ZAFFICO? On the Copperbelt, what is underneath?…”
By the way, you cannot be “partisan” for no one, because you are !MBECILE.
It’s political…
Am fully aware what ZAFFICO…
I see … You want to be told by government what is underneath the
Soil right, for you to fall in the groove?
Keep learning …
Alexander Pope once said
A little learning is a dangerous thing. Drink deep the pierian spring or taste not.
Dr Thats hypothesis.
The whole cb is sitting on mineral.
Its like refusing to sell a house on a a chinese because you suspect there are mineras understand ground.
Secondly there is an Statutory instrument on timber export. Right now there is a ban
Finally dont change THE topic
How will hh revamp zaffico
The only reason ZAFFICO is being sold (listed) by PF is to give the Chinese access to Mukula trees.
You are absolutely right. I am not sure any prudent institutional investor would participate in the IPO or purchase of the shares for ZAFFICO when they go public. You invest in a firm because you are happy with the way the business is being run and you hope to get a return on your investment in the form of dividends and growth of the share price.
I have not had a look at the financial or business plans for Zaffico . I sure the AUDITED financials would not be inspiring for one to put there money. ZAFFICO is a public enterprise and the dilution of such shareholding would require public, unions and cabinet participation.
How many shares will finally be offloaded to the public? Is the Government trying to misled the unwitting public and raise funds for bankrupt enterprise?
Not this Russian trained Economist fat boy again..please Lazy Lungu give him a job like the boy Sampa did by putting him in his mini 25 man cabinet!!
Please, young man! Stick to economics and leave this to us the experts. You can’t be jack of all trades. Shhhhh!!!
Ba Dr Chonya Zambian law does not give a land owner the minerals below.
You did go on air and stated that zaffico has been sold to Chinese, what is your take
Answer: I didn incite anybody
Honestly you can see that his support has nothing to do with an intelligent opposition leader.
If the man went to state house these are kind of answer s you should expect.
!MBECILE
We use ZAFFICO to supply wood for coffins to burry our beloved ones. With sekking ZAFFICO we will now be importing coffins from China.
No one wants to get rich from ZAFFICO except the likes of Jean & Mukula traders.
Habaazoka you deserve a decent coffin too.
Over Zaffico the Chinese be careful cos Zambian have refused.It must be Willing seller and willing buyer.
Habazoka whatever you are surely you become a useful *****??? Walasebanya abandoned TONGA or meanwhile change your name to Phiri and such ****** we
People like Kudos and Nubian Princess will very soon support this text book and kindergarten explanation of sale by public listing. This is the caliber of economists advising the Zambian President . No wonder there joblessness and hunger is ever on the rise since PF came into power.
All these people are dimwits.
HH and followers must tell us how to revamp zaffico . The company is folding. Govt has no money to capitalize
Here is my question to hh and his followers.
QUESTION: How will hh revamp zaffico?
PF has failed give us solution
I am a non partisan political consultant
I think u are talking of another company not ZAFFICO since when was this company folding …it is only one of the very few parastatals reporting profits under IDC don’t just yap without facts. Put Caderism aside PLEASE
There is no timber on the market. I do civil works and we use lots of timber and steel.
Last year 150x50x5000mm soft timber was k78 . Today same piece of timber is K150
Zaffico is not replenishing the timber.
Vote for people that know what to do. How can any outsider do anything now when the insiders are so hostile to all outsiders?
@ Shameless, don’t just accuse your friend of yapping when you are doing the same. Show us the numbers! How much profit did ZAFFICO make in 2017 and 2018 YTD? In the right hands without GRZ interference, ZAFFICO with its Kawabwa tea should be very profitable. Trouble is Chronic mismanagement, cronyism and mixing serious economic matters with Cadrerism and politics with Chagwa the LAZ Convict as Chairperson of IDC!
#4 its political – not everyone is HH follower, in fact am KBF follower.
Savings from silly decisions such as money on fire trucks, over priced contracts and ambulances…
Maybe the solution would have been there for any opposition to know that avoiding purchasing none priority things as mentioned above would have left resources to invest in priority areas like ZAFFICO?
ZAFFICO became famous becoz of Chinese Businessmen were buying Mukula tree in some shady deals from them. ZAFFICO has been making money by selling Mukula to the Chinese so why is Govt listing it on LUSE? ZAFFICO like ZESCO are strategic Parastatals so why sell shares to private Investors and reducing govt shareholding? The likely Investors with deep Pockets are the same Chinese Investors who have been looting the Mukula Tree with the help of PF Corrupt officials. So its not a secret that ZAFFICO is being sold to the Chinese Investors in a dubious deal.
We are not talking about fire tenders here.
The issue is zaffico.
Why are behaving like hh who fails to stick to pick.
Hh was asked.
Who told zaffico has been sold and he started talking about fire tenders and pf corrupt ion. Stick to topic
KBF is not that dull to have such a follower who claims to belong.
You belong to hh and I can simply tell from your mentality
Am a non partisan political consultant
@ talk numbers this was reported by IDC so the numbers are there don’t forget that ZAFFiCo is the only company with the sole mandate to export Mukula and as reported just from Mukula made USD 4 million last quarter all of which we are told went to Kawambwa Tea. ZAFFICo is profitable and that is a fact that is why the Government is expecting the shares to be over subscribed as per the Minister of Finance due to it healthy financial position so folding up it isn’t
It’s political, I pity the individuals or organisations who consult you.
Because any intelligent consultant would know that an economy feeds off from each other in different sectors of an economy.
The fire trucks come into play whichever way you look at it. That’s money gone and creating holes in the economy in perpetuity… as a consultant you should know that. But you are probably one whose gone through life with leaked exam papers, so I blame the leaders for your ignorance.
@KBF how will hh revamp zaffico
Simpple question.
Give one paragraph answer.
Just to help KBF supporter to answer your question. How H H will revamp ZAFICO? by recovering the money stolen from the purchase of fire tenders , ambulances and many other corrupt deals and pumping it into recapitalizing ZAFICO, then use part of the change by taking people like its political consultant back to school for free , so that you learn to understand the difference between REVERSE and forward.
Well said Dr but you sound quite diplomatic and humble in your explanation. Forgive me if I say you have just book lifted your first year notes/lecture
at UNZA. Being the president of economic association of Zambia, I should have expected you to respond in details looking at the manner HH scandalised your association to which he belongs. I have had a lot of respect for you sir and many other learned colleagues but your analysis is too shallow and lacks the merit of your credentials you claim. You have even failed to put forth your opinion as to why it is necessary or not necessary to list on stock exchange. Theres no objectivity in your debate except class notes on what stock exchange does. Better you kept quite sir.
@Denkede Am totally in agreement with you.Am note an economist but when i was reading the article,i was thinking to myself that this sounds just like lecture notes from a text book.
If this is the caliber of economists and lecturers we have,am afraid we are so srewed as a nation.
@Denkede Am totally in agreement with you.Am note an economist but when i was reading the article,i was thinking to myself that this sounds just like lecture notes from a text book.
If this is the caliber of economists and lecturers we have,am afraid we are so screwed as a nation.
Question: It only bad performing companies that must be listed by government?
Question: is it only bad performing companies that must be listed by government?
@ Shameless. Answer my question. How will hh revamp zaffico
Dont behave like hh who fails to answer questions.
Dude. Try to stay with the argument. How are you to keep any politician accountable with your vote and voice if you can’t even follow an argument? Question you should be asking yourself is “what do I know about those seeking my vote as pertains to this issue?” Just try to get out of this “I am for/against HH” line of reasoning for once and actually just try to think things through. I promise it doesn’t hurt. It literally is what sets the developed world apart. It is liberating. Like Bob Marley said, “none but ourselves can free our minds”. Free your mind dude, it’s a beautiful thing.
Hehehehe @ it’s political you are now just becoming comical, ZAFFICO doesn’t need revamping as you put it… your own government has indicated that it is in a healthy financial position and one of the few parastatals making profit …this is not coming from me it coming from your government. Do revamping is out of the question … Please share any article or statement coming from GRZ stating that ZAFFICO is failing???? If you tell me Zamtel yes I will agree with u
So Dr what do you make of the Chinese buying ZAFFICO institutional houses on behalf of the sitting tenants? Is that normal and ethical?
When did the Chinese become so generous? Ask them also to pay our Eurobonds since they have demonstrated great generosity! He who pays the piper controls what tune the piper plays! No such a thing as free Lunch! Second question Dr is do you list an underperforming company or one that has shown strong prospects for future growth? Show us the past and present performance of ZAFFICO and future projections! We need full information before we are swindled by PF in the name of IDC! Remember we strongly opposed the creation of IDC where Chagwa is the Chairman! We don’t trust IDC!
I think the issue here is not whether government is doing the right thing or not, or whether ZAFFICO has been sold or not. For me, it appears people don’t have a lot of trust in this government, following issues like 1 million kwacha fire tender truck (assuming there was no corruption, would this surely be called prudence of national resources, No No No), ambulances which seemed over priced, the variance in sales report on mukula sales reported from china and that of our government and to crown it all, the 4.3 million dollar shelter called toll plaza on the kitwe Ndola dual carriage way, non rebased 43 Billion kwacha spent, 8 pillars, 8 cages,some software and some concrete.
One day I even drove to zaffico . They told me demand for timber is very higher
Everyone on the copper belt wants to be a miller . . Management lamented they have no trees now because of high demand
Saw milling is very sensitive on the copper belt
MMD degazzetted the the forests in ndola where the new airport is coming up.
That area has also been shared by pf officials like Kambwili who have built houses and flats.
In short forest is gone. And as long as it is fully in govt hands them party top officials will keep sharing the land designated for trees
My point is this the shares should be just be ofloaded to Zambians period.If chinese can also buy shares then ZAFFICO is sold indirectly.HH is very right.I don’t support HH but he has a point.Zambian govt has sold ZAFFICO indirectly through shares if chinese have bought shares.Why did chinese pipo buy houses?Zambians let us think we are lacking education.Indeed this country can be sold n pipo remain blank.It’s unbelivable that we have no one in govt to tell us the truth.useless NGOs are also quiet coz they don’t understand business.This is serious for the country.Journalist also just know english and can’t explain business just like hot FM DJs.Bwafya we need qualified journalist to hold this govt accountable.I’m PF but ba lungu should leave now.we want new Deal in PF before it’s too…
CONTI
new Deal in PF before it’s too late
ZAFFICO is not a very big company. There are very huge private timber plantations and milling companies in U.S.A, Canada, Brazil and S. Africa (Mondi-paper making), even Zimbabwe they don’t have timber shortages. I would encourage Zambians to open private timber plantations and milling plants instead of wasting time rioting. There is plenty of unused land.
I THINK WE NEED TO LOOK AT THE ZAFFICO STORY VERY OBJECTIVELY. THE DEVIL IS IN THE DETAILS. THE RIOTS SHOULD BE LOOKED AT IN BROAD CONTEXT. THE REACTION BY ZAFFICO WORKERS SHOULD SERVE AS AN EYE OPENER. PEOPLE ARE CRYING FOR SOMETHING, IT WAS A PROTEST AGAINST THE GENERAL GOVERNANCE BY OUR BELOVED PARTY PF. THESE ARE POOR ZAMBIANS, THEY ARE STRUGGLING TO PUT FOOD ON THE TABLE, LATER ON TO FIND SHELTER AND SEND CHILDREN TO SCHOOL. THE COST OF LIVING HAS BECOME TOO EXPENSIVE FOR AN ORDINARY ZAMBIAN. TAXES ARE COMING IN ALL FORMS TV LEVY, TOLL GATES, FUNERAL INSURANCE, MINIMUM WAGE FOR MAIDS, HICKED FUEL PRICES ETC. PLEASE OUR BELOVED PARTY PF AND OUR DEAR PRESIDENT ECL LOOK AT THE PLIGHT OF OUR PEOPLE. THEY ARE AFRAID THAT THEIR ONLY SOURCE OF INCOME WILL BE TAKEN AWAY BY THE CHINESE. THEY…
Let me end here because YOU chose changing topic
Hh has no councillor on cb apart from ndola rural
He has no councillor in the north.luapula.muchinga.eatern.
As long as he rides of tribal followers who can not see sence in what am saying hh will never rule Zambia
Am professional let me go for work now. Will view messages later in the the after
“Am professional let me go for work now”. Just by reading this statement one can tell the caliber of a person. I am a professional or am professional which one before you go for work please sir?
I am no economist. Can someone put it in simple language and answer these questions? Is ZAFFICO being sold? What is the difference between listing on LUSE and selling? I hear an opposition leader is about to be arrested for saying its being sold.
from the miners point of view, my learned Zambians we privatized the mines with the view of improved jobs, i invite you to come to KCM it is a sad story, back to ZAFFICO if it has to be listed let it be for Zambians only to have shares this country will only be developed by our selves, let us stop fighting each other and put our country first.
This Habazooka gent lost credibility with me the day he said non-economists shouldn’t comment on the economy. Imagine the nerve to think the root cause of our suffering/prosperity is something to be mute about!
Habazoka is a mental retard
This is not about selling ZAFFICO and its trees. It is about the land were the trees are grown. The owners of ZAFFICO will be free to do anything on the land. If they want they can stop growing those tree. It is like a person buying a plot, erasing the structure there and put his own structures. so who ever is buying ZAFFICO buys the land
We can’t get anywhere business wise coz we messed up in politics
The PF will continue raping Zambians because we are so docile.
No matter how well we sugar coat this “listing”, the bottom line is it’s privatization disguised as “offering shares to the public”…and we all know what happened with privatization…..do we have control over the companies we sold…nooo….up to now we thinking of how we can make the mines pay for what’s due of us….it will be the same with Zaffico, how are you going to save the cutting of trees indiscriminately????meanwhile, we advocating for a greener Zambia, a well environment……the pronouncements are made without linking to the overall strategy, everything is disjointed….ala bane, we people let’s learn from our past mistakes…….I can’t believe we have started this privatization war in other forms….we know what happened and we have people we blame for such an…
…….endeavor and yet we still insist on doing it again and again…..believe me no Zambian will get any meanfull investment from this share thing….Coz those to buy are very few…..the majority don’t even understand that it’s investment for their future….even if they did which savings will they use to buy enough shares to have a minimal impact on their lives……..
Iwe fat boy Dr Haabazoka, if at all you are looking for a Job just take your CV directly to…… instead of advocating and supporting highly suspicious transactions waumfwa te? Uletunasha fye by busy blowing your trumpet kwati lipenga lya mu Jerusalem. sha!!!! kangalile ukutali styopeti.
If you wrap your brain in a green PF chitenge decorated ECL2021, you cease to be a professional because you can’t think professionally. I’ll comment further after perusal of the prospectus for the listing, that’s what will explain what ECL & Associates intend to do.
Comrades, what you should know is that HH played a major role during privatization and truelly he knows the game and rules. May be what he is saying about these companies is true based on the experience, what is involved for a company being sold to private institutions. Remember about 250 companies were privatized in less than 10 years of MMD and others were retaken back when Data came into power. Let us pray for God’s intervention and Mother Mary’s intercession.
HH valued and helped sell Zambia’s wealth at privatisation to his plunderers and never raised any issues but what has changed now. Is it because now he is not a benefecially of the deals? Is he trully speaking for poor Zambians or western capitalists pay masters who are on the touchline for final plunder of our natural resources? A sworn Capitalist like him can not fool us the way he’s doing and believe him. Let’s open our eyes Zambian. The PF may have ravaged our economy but HH is part of it through his involvement at privatisation. I can’t believe that he can be against the sale of public entities now. No wonder they say ‘ Politics is a dirty game’ A smart gentleman like him has suddenly become dirty & can even tell lies?
Theorist you had no stock exchange in Russia.
Has any minister resigned yet seeing that yes indeed Zaffico is being sold??
As a shareholder in three companies listed on LUSE, I am so shocked by the ignorance and xenophobia being displayed here. Why don’t you guys seek audience with reputable stock brokers to seek clarification on whether listing ZAFFICO on LUSE is the same thing as selling the company to the Chinese?