, September 14th, in Maputo, the launch of “Research on Capital Markets”, a report analyzing companies with securities listed on the Mozambique Stock Exchange (BVM).
The ceremony was attended by the Chairman of the Board of Directors (PCA) of BVM, Salim Cripton Valá, who, on the occasion, highlighted that it is an instrument of vital importance for the market, as it outlines the profile and performance of companies, and serves as a basis for decision-making by investors.
“For us, this research carried out by a company, in this case Finantia, which brought an independent view on HCB and Tropigalia, comparing it with similar companies from other parts of the world, was very important. For us, it is an opportunity to diversify communication channels with investors, the market, businesspeople and the public. This allows investors to have more information and also promote education and financial inclusion in Mozambique”, said Salim Valá.
In addition to serving as a barometer for the main players in the sector, the document aims to contribute to increasing financial literacy, especially with regard to the functioning of the Capital Market.
The report focuses its approach on Hidroeléctrica de Cahora Bassa (HCB), a company in the State Business sector in the energy sector admitted to the stock exchange in 2019, which, in the recent past, used the Capital Market to finance itself, through an Offer Public Sale (OPV) of shares.
In addition to HCB, Tropigalia was the subject of analysis in the study. It should be noted that last year Tropigalia sold three million shares, equivalent to 10 percent of its shareholder structure, through a Public Subscription Offer (OPS).
Among the conclusions, what stands out is the fact that the price of each HCB share is currently being valued below its real market value, taking into account the company's current performance and future prospects.
“The most obvious conclusion from HCB's assessment is that the share price on the stock exchange has not reflected the company's future prospects (based on its history and conservative projections of financial indicators in relation to it) nor is it in line with the valuations of comparable companies, undervaluing their real value”, states the report.
According to the report, assuming truly conservative premises, the share value of Hidroeléctrica de Cahora Bassa “should never be less than 4 meticais”. It should be remembered that, at the time of the Public Offering, each HCB share was sold for three meticais (3.00 MT).
Reacting to the report's conclusions, the President of the Board of Directors of HCB, Tomás Matola, began by recognizing the relevance of the findings contained in the document, precisely because they reflect the current situation and also because they meet the institution's concerns.
Tomás Matola highlighted that, from an operational and financial point of view, the company has been presenting an excellent performance, a reality that contrasts with the share price in the Capital Market. Faced with this scenario, he left the guarantee that a set of actions will be carried out with a view to reversing the current situation.
“He was precise and identified our main concerns. The company has been excellent, from an operational and financial point of view. However, in the Capital Market, the reality is different. Based on performance, the share value should be above par, but the numbers have shown exactly the opposite. We have the challenge of countering this situation, which challenges all financial market theories”, reiterated Tomás Matola.
“Capital Market Research: The New Communication Channel with the Market and Investors” was prepared by Finantia, a financial consultancy company operating in Mozambique.