CALL TO DOUBLE AGRIC'S GDP SHARE:

A SHARE split is a corporate action in which a company divides its existing shares into multiples thereby increasing the number of the outstanding shares while the underlying total market value of the business remains the same.

The shares are split in proportion to an investor’s existing shareholding structure as at a specific date such that proportionate equity.

Share splitting is the same as exchanging a $10 note for two $5 notes. Though you will now have more number of shares than what you were holding, the total capital value of those shares would remain unchanged as the per-share price will fall.

The share split is based on a set ratio, for example, a two for one, three for two, or any other combination based on the objectives that the company is trying to achieve. The most common share split ratio is a two for one in which shareholders receive one additional share for each share previously held.

Unlike an issuance of new shares, share splits do not dilute the ownership interests of existing shareholders. Instead, a share split increases the number of outstanding shares which is subsequently accompanied by a proportionate decrease in nominal price of the share.

The share price immediately adjusts to reflect the share split. Companies often conduct share splits in order to:

◆ Promote trading activity of the company’s shares as the reduced share price makes the shares more affordable

◆ Broaden its investors base as the share becomes more accessible to more investors in particular the retail investors

◆ Improve market liquidity as more investors get to buy and sell the shares hence enhancing price discovery. Share splits are usually considered as a signal that a company’s stock is doing well thereby boosting demand for its shares.

Investors should note that in terms of ZSE listing rules, all share splits require shareholder approval at a general meeting.