Of Cautionary statements and Profit warnings

Quite a few companies have issued cautionary statements lately advising shareholders to trade cautiously for one reason or another. A few come to mind CFI, AICO and Radar. It is quite interesting to see corporate activity so early into the year, but who knows, some of these deals may not happen and trust me no one will even make an issue of it. It is just so common in Zimbabwe. Clearly for any company to caution shareholders it must be doing something, otherwise what is the use of causing investors anguish or excitement? Well in my experience cautionary statements have been issued and we have waited for months even years in some extreme cases before seeing any action.

Corporate transactions in Zimbabwe are affected by a number of things, management interest, regulatory approvals, valuation disagreements, shareholder issues etc. You see the era of hyperinflation left many people thinking their assets are worth more than they really are when it comes to concluding deals. I am hoping that this year will be different and we will see all parties accommodating each to save companies and ultimately jobs. We need some action here!

The Zimbabwe stock exchange sees very few earning warnings, save for Star Africa and Art who warned of losses before releasing their numbers. You really never see too many managers sticking their necks out! It is even less common to see companies warning shareholders that they will be posting results ahead of expectations. It is very rare and almost never happens!! Everyone wants to surprise the market and cash in i suppose when speculators and investors alike react in awe at huge profits and even dividend by pushing share prices through the roof. Its only a few days before we see the early birds posting their results. I have a very good feeling that most wont disappoint.