Zimbabwe Stock Exchange

Written by: African Alliance on July 25, 2013.

The ZSE Industrial gained 1.2% to close the week at 224.4 on the back of gains in Mashonaland Holdings (+19.3%), Barclays Zimbabwe (+10.7%), and Innscor Africa (+9.3%). During the week, losses were recorded in National Foods Holdings (-4.3%), Econet Wireless (-2.2%), and Kingdom Meikles Africa (- 1.6%). The top traders by value were Delta Corp Zimbabwe (USD 6.4m), Econet Wireless (USD 1.8m), and CBZ Bank (USD 1.2m). Trading in these shares accounted for 66.6% of this week’s turnover of USD 14.1m. The average weekly value traded in the last six months is USD 8.4m. The ZSE Industrial is up 47.2% YTD and the total market capitalisation is currently USD 5.8bn.
The Zimbabwe National Statistical Agency, published inflation numbers for the month of June this week. All items Consumer Price Index came in at 1.87% y/y, shedding 33 bps from the prior month rate of 2.20%.The food and non-alcoholic beverages y/y inflation was recorded at 2.90% while the non-food inflation rate came in at 1.35%. On a m/m basis, inflation showed a decline of -0.13%.
Aico Africa is reportedly set to dispose of a 20% shareholding in SeedCo to a United Kingdom seed company, Limagrain. The money realised from the transactions would be used to finance some of the group’s operations. Aico owns 50% shareholding in SeedCo, 100% in the Cotton Company of Zimbabwe and 49% in Olivine Industries.
Toronto Stock Exchange listed miner, New Dawn on Friday said consolidated gold production at its operations in Zimbabwe for the second quarter of 2013 increased by 4.7% compared with the same period last year. In a trading update, New Dawn said 9 986 ounces of gold were mined during the quarter ended on 30 June, compared with 9 536 ounces produced during the same period last year.
MBCA Bank has secured USD 75m from majority shareholder, Nedbank Group of South Africa, to provide lines of credit to Zimbabwean companies. The funds will largely be utilised to finance agricultural and mining sector projects.
An SA based firm, Vasari Global Holdings, has reportedly won the bid to acquire a controlling stake in Cairns Holdings. Vasari was amongst four leading bidders eyeing the Reserve Bank of Zimbabwe stake in the group. The other three are Dairibord, Judah Holdings and Eastern Trading Company of South Africa.
Excerpt from The Africa Weekly

Zimbabwe Stockexchange rallies

ABOUT 67 million shares valued at US$6,3 million were traded on the Zimbabwe Stock Exchange on Friday last week, representing a staggering 2 343 percent recovery in sales.
The increase in the value of shares traded on the ZSE last Friday represented a 781 percent increase compared to Thursday. However, the recovery in both volumes and value of shares could not stop the main industrial index sliding southward. The main index was 0,6 percent weaker on Friday at 211,2 points after losses in Barclays, which fell 20 percent to US4,5c as Old Mutual shed 7 percent to US214c, Delta slid 2,1 percent to US140c, Meikles softened 1,6 percent to US31,5c and CBZ shed 0,7 percent to US13,5c.
However, the ZSE mining index was unchanged at 73,3 points as Falgold, Bindura, RioZim and Hwange failed to trade as investors shied away the from resource firms' shares. The top five gainers were led by Zimplow, which added 9 percent to US5,5c, ZHL gained 7,7 percent to US1,4c, Afdis rose 3,1 percent to US33c, Econet surged 3,1 percent to US66c while PPC moved 2 percent to US250c.
FBC led the top five value leaders after US$5,1 million of its shares changed hands while US$400 320 Econet shares were bought followed by Mashhold at US$343 874, CBZ at US$106 432 and Natfoods which had US$43 810 worth of shares sold.
Pioneer (US8c) leads the value gainers year to date at 700 percent followed by GB Holdings (US0,5c) and Willdale (US0,25c) both gaining 400 percent and Masimba (US12c) and Trust (US0,8c), which gained by 300 percent. Trading on the ZSE continues to be dominated by cash rich foreign investors due to the liquidity challenges pervading the entire domestic markets, which constraints local investors.
The country showed significant potential for recovery growth after dollarisation and adoption of the short-term recovery policies, but started showing signs of slow down in 2011, which forced Government cut growth forecasts. However, the factors arresting the country's potential for growth have been lack of affordable capital to fund companies' working capital and capital expenditure needs.
Where capital is available it is invariably short-term and prohibitively expensive. Most companies that borrowed at dollarisation in 2009 have ended with huge interest burdens now suffocating progress towards achieving profitability. However, expectations are that after the harmonised elections expected at the end of this month and the new Government comes into office, investors who have been sitting on the fence will come to decide to act and invest on the ZSE and various other sectors.
Zimbabwe has innumerable investment opportunities, broadly, in such sectors as mining, agriculture, tourism and manufacturing while lucrative opportunities also exist in specific sub-sectors of infrastructure, financial services, ICT, pharmaceuticals, agro-business, value addition and retail.

situation this week

A good recovery week for global markets with major Asian markets up 2 to 3%, US markets up 1% and EU markets up 1 to 2%.

Gold took another dive this past week losing 8.66% and finishing under the $1200 level – its lowest in 3 years and worst quarter performance since 1920 (22% decline since April this year).

Oil however, rose by 1%.

76-year-old former Italian Prime Minister Silvio Berlusconi was sentenced to seven years in jail after being convicted in a sex trial.

The latest edition of The Banker's Top 1,000 World Banks showed that ICBC (The Industrial and Commercial Bank of China) jumped to the top spot earning it the world’s richest bank title overtaking JP Morgan and Bank of America.

According to its latest filings, Apple did not pay any UK corporation tax for 2012 after making $15 billion profit from EU sales alone.

Despite a slowdown in Europe's top economies, latest data shows that the super rich in Europe increased their wealth last year. Their combined fortunes surged 13% to $3.4 trillion. Full article: https://www.devere-group.com/news/Super-rich-Europe-richer-high-net-worth-estate-planning.aspx

Investment/saving ideas for the week:

Educating your children: obviously this falls as a priority to every parent, but do you really take into account how much your children cost you? How much money do you save and invest for their education each month? It’s important to consider the fact that fee’s rise every year, and more often than not, as a percentage, more than your salary does. However by simply saving money you therefore are actually going backwards, you need to have your investments for your children growing at least 5 to 10% average each year to keep up with fee inflation.

“The Universities and Colleges Admissions Service announced that the number of students applying for university studies is still well below levels seen before tuition fees trebled.“ https://www.devere-group.com/news/Education-fees-UK-university-students-ucas.aspx

Shane Helberg ACSI

Senior Wealth Manager

shane.helberg@devere-group.com

www.devere-group.com

www.shane-helberg.com