Friday, July 26, 2013

Zimbabwe Stock Exchange

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

Tuesday, July 2, 2013

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

Thursday, November 29, 2012

Zimbabwe: Banks in Panic Mode

Zimbabwe: Banks in Panic Mode


Most commercial banks in Zimbabwe are believed to have plunged into panic mode after Finance Minister Tendai Biti announced plans to introduce measures that could eat into a substantial chunk of the financial institutions' income. Sources in the banking sector said the Bankers Association of Zimbabwe has since engaged Reserve Bank of Zimbabwe Governor Gideon Gono for a Memorandum of Understanding around a number of burning issues. Discussions are likely to revolve around the issues of lending, interest and savings rates and bank charges among a host of other matters.
Treasury also wants banks to agree with the RBZ on a framework for lending rates, but with a 10 percent cap above cost of funding. But the most contentious aspect of discussions is likely to centre on the directive that banks should not levy deposits below US$800.
Minister Biti also directed that all deposits above US$1 000 held for over a month should attract interest of a minimum of 4 percent per annum.
"The measures will do more than harm the banks' income. But the banks have engaged the Reserve Bank of Zimbabwe on the Memorandum of Understanding the minister announced," a source said.
"But if you look at the incomes of most people you realise that very few earn more than US$800. It means banks will provide banking services for free and that will cripple banks," the source added.
Efforts to get comment from the Bankers Association of Zimbabwe president Mr George Guvamatanga failed as he did not answer his mobile phone.
Both Minister Biti and Dr Gono have in the recent past expressed strong reservations over "usurious" lending rates, bank charges and commissions banks levy clients yet they offered negligible interest on deposits. Expectations are that the fiscal and monetary authorities will enforce the planned measures through amendments to the Banking Act next year.
Announcing the 2013 Budget Minister Biti also lamented a situation where banks made more than 40 percent of their income from fees and commissions instead of their core business of lending.
However, sources said, BAZ has been lobbying for moderation of some of the directives that Minister Biti plans to introduce next year.
Banking institutions have often defended their actions arguing they were only following the macro-economic fundamentals of the economy.
After a decade of economic instability banks and most other corporates have found it difficult to gain access to affordable lines of credit.
But this spawned a vicious lending rate regime for the little funding banks could mobilise, with lending rates as high as 30 percent per year.

Zimbabwe threatens to prosecute firms flouting ownership law


HARARE — Zimbabwe warned on Wednesday that foreign companies that fail to cede majority stakes to locals as required by a controversial law risk being prosecuted.
The Minister of Indigenisation and Economic Empowerment Saviour Kasukuwere said some businesses had ignored the law and reminded them to "realise the folly of what they are doing."
"I wish to make it clear that the law will take its course in such matters of deliberate disregard of the rule of law," said Kasukuwere during an economic conference in the capital Harare, attended by President Robert Mugabe.
Kasukuwere said anyone who "does not want to comply with the laws of this country or associate themselves with the aspirations of black Zimbabweans has no place in the affairs of our country."
The two-year-old law forces foreign companies to cede 51 percent of their shares to indigenous Zimbabweans.
"This programme is irreplacable as it is founded on the ideals of our independence struggle."
Several companies like Zimplats, the Zimbabwean unit of South African's Impala Platinum, have submitted their plans to hand over majority shares to local people.
The programme is at the centre of a dispute between Mugabe and Prime Minister Morgan Tsvangirai, who formed a coalition government three years ago after disputed polls.
Tsvangirai has said the law will drive away foreign investment, as the country is recovering from a decade-long economic collapse.

Thursday, November 1, 2012

IMF and Zimbabwe


Last night, The Executive Board of the International Monetary Fund (IMF) released a
press statement on its relaxation of restrictions on technical assistance to Zimbabwe
which opens the way for future staff monitored programs. Below we provide extracts
from the press statement.
The restrictions on technical assistance were a result of Zimbabwe’s protracted
financial arrears to the Poverty Reduction and Growth Trust. In relaxing the
restrictions, the IMF took into account a significant improvement in Zimbabwe’s
cooperation on economic policies, the authorities’ efforts and renewed commitment to
address its arrears problems, and Zimbabwe's severe capacity constraints in the IMF’s
core areas of expertise that represent a major risk to the implementation of the
government’s macroeconomic stabilisation program. The relaxation of the restrictions
opens the way for Zimbabwe to agree on an IMF staff monitored economic program.
Such a staff-monitored program (SMP) would mark another significant step toward
normalisation of Zimbabwe’s relations with the IMF.
SMPs are informal agreements with IMF staff whereby IMF staff provide advice to the
authorities on the design of their economic program, and monitor the implementation
of such a program. SMPs do not entail endorsement by the IMF Executive Board nor
financial assistance.
Effectively the IMF will resume technical assistance in certain new areas to support
Zimbabwe’s formulation and implementation of a comprehensive adjustment and
structural reform program that can be monitored by the staff. The current and new
areas for IMF technical assistance to Zimbabwe are in the fields of:
i) tax policy and administration;
ii) public financial management and expenditure policy;
iii) financial sector reform;
iv) central bank reform;
v) monetary and exchange policies;
vi) macroeconomic statistics;
vii) anti-money laundering and combating the financing of terrorism; and
viii)any other area that would support the formulation and implementation of a
comprehensive adjustment and reform program that can be monitored by the
staff.
This is a positive development for Zimbabwe especially in light of the recent
moderation in the economic recovery. The country needs certainty regarding policy
implementation and further reforms for the growth rates to accelerate again. The
country remains vulnerable to external shocks as the useable international reserves
remain very low at approximately 0.3 months of imports. The Minister of Finance is
due to present his 2013 National Budget on Thursday 15 November 2012.

Saturday, September 22, 2012

Zimbabwe: Settling Scores Under Guise of Indigenisation

MEDIA, Information and Publicity minister Webster Shamu last week gave what he said was his final warning to the private media for criticising President Robert Mugabe.
"There is no need of attacking the president or the leadership for no reason," Shamu said. "This is an abuse of the freedom that has been given to them.
"We will work together with the Zimbabwe Media Commission to revoke those licences because we cannot watch while the country's leadership is assaulted," he warned.
It seems Shamu's self-righteous indignation is unhelpful considering we have heard no complaints from him when the state-controlled media goes into overdrive in its coverage of Prime Minister Morgan Tsvangirai's love life and other things.
The Saturday Herald and Sunday Mail should have carried X-rated content warnings considering the obscene torrent they spewed on Tsvangirai. Without doubt Nathaniel Manheru and Jonathan Moyo's mudslinging will have given H-Metro scribes a good run for their money.
So much for "family" newspapers!
Most of what they wrote cannot be repeated in the private media lest the Zimbabwe Media Commission comes knocking. Indeed some animals are more equal than others.
Meanwhile, it seems Zanu PF central committee member and former Chitungwiza executive mayor Joseph Macheka has been downgraded from a comrade to a mere "mister" after giving away his daughter, Elizabeth, to Tsvangirai on Saturday.
Before that, the Sunday Mail and other state-controlled media prefixed Macheka's name with "Cde". All this changed on Saturday, with the Sunday Mail settling for the less revolutionary title of "Mr" Macheka.
That's the way it is now.
There is no end in sight to the wrangle pitting Tsvangirai and his ex-lover Locardia Karimatsenga-Tembo. Despite Tsvangirai's earlier claims that he never paid bride price for Locardia, a video showing what looked like marriage negotiations between the Tembo and Tsvangirai families suggests otherwise.
This week Lorcadia took a dig at "playboy" Tsvangirai, saying she is still pursuing her US$15 000 a month maintenance bid and insisting she remains the PM's wife until he officially divorces her.
Conspiracy theories aside, the premier got himself in a morass for which only he should shoulder the blame.
Even bunga bunga maestro, former Italian prime minister Silvio Berlusconi would be green with envy at Tsvangirai's "sexcapades" as alleged by his ex-lovers.
Clearly, Tsvangirai has not learned any lessons from the days of Ari Ben-Menashe where it became manifest he was under surveillance from state agents wherever he goes.
Muckraker was amused by Zanu PF apologists who opted to take the moral high ground over Tsvangirai's love saga. No women's rights groups, "analysts" whined, have condemned Tsvangirai's actions. Curiously, some notorious wife-bashers and womanisers also joined the fray crying louder than the bereaved.
Indigenisation minister Saviour Kasukuwere has made another about turn, this time saying Chinese companies involved in agriculture are immune from the indigenisation law that requires foreign-owned firms to cede 51% of their shareholding.
According to the Standard, Kasukuwere said the companies had made "cash injections and this is the kind of investment that I want and I don't apologise".
Yet Kasukuwere has been shouting himself hoarse saying even investors from countries with friendly relations with Zimbabwe will not be exempted from disposing majority shareholding to locals.
"The Act will be implemented without fear or favour," Kasukuwere said in August in response to Reserve Bank Governor Gideon Gono's call for a more flexible approach to indigenising the banking sector.
"Where foreign investors bring in clear long-term benefits to the country, a reasonable degree of flexibility ought to be exercised in allowing investors to hold at least in the initial stages, majority shareholding so as to deliberately accord them escalated dividends that enable them to plough back their initial investments outlays," Gono had said.
Gono has accused Kasukuwere of arbitrarily applying the indigenisation law.
But Kasukuwere hit back at Gono's "profane language" declaring: "Individual views should remain so, but the law of the land should remain supreme."
Now Kasukuwere is singing a different tune. He has decided to exempt Chinese companies because "they have brought in millions of dollars, (and) sub-contracted our small-scale farmers in this country".
The millions of dollars invested and jobs created by other foreign companies are inconsequential in Kasukuwere's book. Undeterred by this glaring case of double standards, Kasukuwere took another opportunity to threaten foreign-owned banks.
"If they are thinking that one day they will get out of this problem, then they are like ostriches hiding their heads in the sand thinking that nobody is seeing them," he said.
"Can Barclays Bank tell me how many farmers they have supported? Can Standard Bank tell me how many farmers they have supported?" Kasukuwere wanted to know.
Maybe it's because the farmers have leases, not title deeds, which are not bankable and have led to banks like Agribank hitting hard times after politicians masquerading as farmers defaulted on their loan repayments.
Kasukuwere's crusade against foreign-owned banks is relentless despite being a significant shareholder in the ill-fated Genesis Investment Bank before its demise. He now wants to mastermind the failure of the entire financial sector by indigenising banks when most of the institutions are already under the control of locals.
Said Kasukuwere before Genesis went bust: "Here is a company (Genesis) which has gone under not because of mismanagement, but purely because of sanctions."
He recently declared that "foreign banks whose parentage in any case continues to attack and affect our people with illegal sanctions cannot be defended by any logical Zimbabwean".
So it is all about fixing the West for the "illegal" sanctions then, not applying the law.
Developing countries have been urged to unite and speak with one voice in order to be heard in a world dominated by the West which invests heavily in its propaganda machinery, ZBC reports.
This was said by China's Director of the Information Office of the State Council, Hu we Ping at the closing ceremony of a seminar for media officers from Zimbabwe in Beijing.
Only last year, the United States poured in excess of US$10 billion in its mouthpiece, Voice of America, to "drown" voices of the majority poor in the world, Hu said.
Does he not mean it the other way round considering listeners run away from such archaic and partisan broadcasters as ZBC to tune in to the so-called "pirate" radio stations which offer an alternative to Zanu PF propaganda?
Ironically Chinese radio jamming equipment is used to drown out the "pirate" radio stations' signal.
The fallout over President Robert Mugabe's comment on Jamaicans continued unabated in the island nation. The Jamaican Observer opined that Mugabe's tirade against Jamaican men might have been stirred by comments made in July by former Jamaican Prime Minister P J Patterson.
Patterson, who bestowed the honorary Order of Jamaica title on Mugabe in 1996, made some not so flattering remarks about Mugabe and his government in response to questions by journalists.
The former premier made the trip to Zimbabwe with reggae superstar Bob Marley for the Independence celebrations in 1980. He was recently asked to give his opinion on Mugabe.
"We feel, certainly the rest of the world that has supported Zimbabwe all along in the struggle, we would wish that even at this late hour we would see some sort of shift back towards the fundamental principles of freedom, particularly for the press, and respect for the judicial process," Patterson said.
Patterson also spoke about allegations Mugabe had rigged the 2002 presidential elections which brought about Zimbabwe's 12-month suspension from the Commonwealth. Harare then pulled out of the grouping after refusing to accept its decision to maintain an indefinite suspension.
The former Jamaican prime minister chaired that meeting in the Nigerian capital Abuja in December 2003.
"We actually were doing everything to afford Zimbabwe some opportunity of getting back in line with the principles that govern membership of the Commonwealth. We were very disappointed, quite frankly, that President Mugabe chose not to respond to our overtures," he said.
According to the Observer, Jamaica is now awaiting a clarification or apology from Mugabe for broad-brush criticism of Jamaican men.
The Zimbabwe Development Party (ZDP), of the elections-should-be-held-this-year without-a-new-constitution fame, has sent a letter to South African President Jacob Zuma imploring him to end the impasse between the parties in the GNU.
Fronted by Kissnot Mukwazhi, the ZDP sent a lengthy but typo-ridden letter asking Zuma to "help us to stop gossiping, (and) cooking stories about each other".
"We don't want in strongest terms bombs to enhance power transfer," the ZDP asserted.
"This is not a call for interference to our home affair, but a call to help your needy small brother Zimbabwe to be economically, political and socially stabilise."
The ZDP also asks Zuma to help Zimbabwe become "a member of the gold Brick just like yours", referring to the acronym Brics; an association of leading emerging economies comprising Brazil, Russia, India, China and South Africa.
They go on to appeal for Zuma to remind his "counterparty (sic) our President Cde RG Mugabe that he has done a lot of good to us as his children as Zimbabweans, but his further stay in power will erode more of our independency (sic) gain".
With such poor communication skills, Mukwazhi can kiss any chances of being taken seriously goodbye!
Finally The Zimbabwean reports that President Robert Mugabe has urged the nation to embrace Western music. Speaking at the official opening of the Research and Intellectual Expo where he also made the now infamous Jamaica comments Mugabe said:"I was watching TV and saw people in DRC having an orchestra while here we still like to play our marimbas. But we used to have such music here and I remember very well that I was a conductor of an orchestra during my school days."
That surely cannot be a vote of confidence for the rump-shaking Mbare Chimurenga Choir or the Born Free Crew. Clearly the president expects better and we hope Cdes Shamu and Amos Mahendere have taken a cue.
And when the president says orchestra he is not referring to Alick Macheso's Orchestra Mberikwazvo!