ZSE gives 1 month COVID19 reprieve for due results

  • ZSE gives 1 month COVID19 reprieve for due results
  • Most companies are expected to report earnings before the end of March
  • Companies have an option to livestream earnings to avert spread

The Zimbabwe Stock Exchange has issued a statement in line with the global outbreak of coronavirus which is now classified as a global pandemic by the World Health Organisation.

In a statement to listed companies the bourse said it is giving companies a grace period of 30 days after the lapse of the conventional period upon which listed companies are expected to release their earnings.

According to the listing requirements companies listed on the bourse are required to periodically report their financial statements and are given 3 months post their reporting period to publish the earnings to the public.

Companies whose year end is December 2019 are therefore expected to report their earnings by not latter than the end of March. Similarly companies whose year end is June would be expected to release their interim results before the end of March. These collective companies were expected to release their earnings within the next 7 days.

The ZSE said it is giving the grace period to companies in light of the global spread in the pandemic which has now claimed one Zimbabwean. On Monday the second COVID19 patient recorded in the country succumbed to death at the isolation centre, Wilkins Hospital.

The grace period has also been extended to companies with AGM falling due. Companies are expected to hold an Annual General Meeting once a year and not latter than a year after the preceding AGM.

At the AGM shareholders typically caucus but mostly through proxies. A typical AGM in Zimbabwe would attract about 15 shareholder proxies and 30 media persons plus at least 10 directors from the company holding the meeting.

These numbers imply that the likelihood of a caucus of more 50 people is high and these numbers have already been flagged by the government as not allowed under new laws to control the coronavirus spread.

Most companies however have the option of utilising online livestreams to beam their annual general meetings and analyst briefings. In markets such the US, Europe and Asia, companies typically utilise livestream services known as earnings call) to present their earnings to analysts and conduct their Annual General Meetings.

This usually serves to cover a wider geographical spread of analysts dotted across the globe and would typically require much to caucus them within a particular place which is not virtual. While this is the standard in the developed world, it is not the same in developing countries including Zimbabwe.

In Zimbabwe not a single company has exclusively conducted its earnings call live online and adoption of the service will be a new experience. Although it is the most effective way of communicating to stakeholders under the current environment and even in future post the virus, the low levels of internet penetration and smartphone penetration are a hindrance to the effectiveness of the model.

However, on the good side, all key corporations involved in the investments markets such as pension funds and asset managers all have ability to easily to tap into livestreams using present internet capacity installed at their respective stations.

It remains to be seen how companies will work around the hurdle to give value to shareholders whose anxiety grows as results release is further delayed as well as key players such as analysts who are responsible for valuations.

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