By Tawanda Musarurwa

HARARE - Pan-African invest-ment managers, Imara Africa Securities, says the Zimba-bwe Stock Exchange (ZSE) maintains significant potential upside going forward – but that’s for durable investors.

Although the strategists are predicting unspectacular returns from the local bourse –if any – the focus is on taking a more long-term approach.

In its Sub-Saharan Africa Stock Markets 2015 Review and 2016 Outlook, Imara said “the performance of the ZSE in 2016 will depend on the authorities addressing the macro-economic fundamen-tals.”

“Although the economic envi-ronment is likely to remain challenging, we believe that ZSE valuations are generally

attractive for long term inves-tors.

“In our view, the ZSE still car-

ries good long-term growth potential given the econo-my’s strong growth prospects around the area of mineral endowment, albeit off a low base,” said the investment managers.

“We believe that it will be dif-ficult for ZSE stocks to post decent capital appreciation, instead we urge investors to be defensive and also consider dividend yields.

“The market sell-off has resulted in relatively unde-manding valuations, espe-cially in comparison with regional peers for most blue chips, although we note that growth rates for Zimbabwe have turned negative in some cases. Given the economic

News Update as @ 1530 hours, Friday 19 February 2016Feedback: bh24admin@zimpapers.co.zwEmail: bh24feedback@zimpapers.co.zw

Imara forecasts long term uptick potential for ZSE

outlook we believe that vol-atility on the ZSE will stay high. In that regard, investors should ride the speed humps, remembering to maintain a careful selection policy.

“Investors should note that the volatility in valuations nor-mally creates buying oppor-tunities and we recommend picking up the blue chips on weakness. Given the limited depth of the ZSE, patience is generally required to build a position.”

But it is more likely than not that most corporates will post negative earnings growth rates this year, said Imara. According to Imara, investors on the local bourse should adopt “a bottom up strategy.”

“In our view, blue chip stocks will offer defensive qualities that can limit the downward risk of equity portfolios. Our picks tend to be monopolistic, lowly geared, well-managed with strong cash generation abilities and solid balance

sheets.”

Some of these recommended stocks include: British Amer-ican Tobacco Zimbabwe, Econet, AFDIS, Innscor, Nat-foods, Old Mutual, Padenga and SeedCo.

Imara also positively rated listed financial institutions.

“Given the tight liquidity con-ditions and limited credit lines we believe that bank asset quality pressures will remain elevated. We rate banks at best as Spec Buys and our picks in this space include Barclays, CBZ Holdings, FBC

Holdings and NMBZ Holdings.”

The ZSE had its shakiest start to a year ever. Earlier on Tuesday the equities market hit its lowest level since April 30, 2009 after dropping 0.59 to settle at 99.80. And it has declined further in the follow-ing few trades.

However, the investment man-ager is determined that its long-term prospects are good.

“Given the limited depth of the ZSE, patience is generally required to build a position,” added Imara.●

2 NEwS

BH243

By Munesu Nyakudya

HARARE - About 85 per-cent of SMEs are yet to be licensed by the local author-ities, official figures from the Ministry of Small and Medium Enterprises and Co-operative Development show.

Addressing delegates at the launch of the Informal Sec-tor Formalisation and Co-op-erative Policy (2005) Review Consultative Processes in Harare yesterday, the Min-ister of Small and Medium Enterprises and Co-opera-tive Development Sithembiso Nyoni said her department was disappointed with the low levels of compliance.

“I cannot over emphasise the importance of SMEs to our country........It is however disappointing to note that only 15 percent of these MSMEs businesses were licensed with the local authorities.

“This figure shows that 85 percent of SMEs businesses

are not registered, reflecting high levels of informality,” said the Minister.

“Therefore it is impera-tive that the Government, through the Ministry of Small and Medium Enterprises and Co-operative Development take the driving seat to for-malise the operations of all small and co-operatives in Zimbabwe to promote the growth of this sector.”

Minister Nyoni said her department is defining for-malisation of informal enter-prises and SMEs not as an imposition of rules or regula-

tory measures but as recogni-tion of the economic role that this sector is playing, with a view of boosting capacity, growth and contribution of this sector to economy.

She added that formalisation will help local SMEs access regional and global markets.

“Formalisation can be viewed as transition from the infor-mal to the formal sector in Zimbabwe. The Ministry is aware that for our small and medium businesses to access regional and international markets, and benefit from preferential trade agree-ments that we are party to, there is need for registration processes as well as quality validation of products.”

Meanwhile the Ministry is also reviewing the Co-operative Policy of 2005. Consultative workshops will commence from February 29 to March 18, in all the country’s prov-inces.●

4 NEwS

Sithembiso Nyoni

85pc of SMEs unlicensed: Minister Nyoni

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BH24 Reporter

HARARE - PPC Zimbabwe cement manufacturing com-pany has appointed Mr Kelib-one Masiyane as its new man-aging director to replace Mr Njombo Lekula who was rede-ployed within the group.

PPC Zimbabwe is a subsidiary of South African cement manu-facturing giant, PPC. According to the group, the development is part of the company’s new appointment exercise which was taking place in the group’s international companies.

“Following the recent re-de-ployment of former manag-ing director of PPC Zimbabwe Njombo Lekula as the manag-ing director of PPC’s interna-tional operations the country’s executive team has been fur-ther strengthened through a number of new appointments.

“Most notable is that of former general manager of Colleen Bawn and the Bulawayo Fac-tory, Kelibone Masiyane as PPC Zimbabwe’s managing direc-tor,” said PPC in a statement.

Mr Masiyane had worked for PPC since 1993 in various divi-

sions.

He is a holder of an Honours Degree in Applied Physics and an MBA both from NUST. PPC said Mr Masiyane joined the company as an attachment student in 1993 where he was part of the commissioning team of the new kiln line and joined PPC officially in Decem-ber 1994 after completion of his first degree as a trainee electrical engineer.

In 2003 he moved to the pro-duction department as the production superintendent becoming the production man-

ager in 2005 a position he held until January 2009 when he was appointed the general manager of the Colleen Bawn Plant.

In October 2014 Mr Masiyane became general manager for both Colleen Bawn and Bul-awayo Factories. In terms of other appointments, PPC appointed a new executive which comprises of commer-cial director Mr Iain Sheasby, general manager of the finance Ms Karen Mhazo while Mr Trust Mabaya was elected group human resources manager.●

6 NEwS

Lekula exits, Masiyane appointed to lead PPC Zimbabwe

BH247

By Funny Hudzerema

HARARE – Twenty local women entrepreneurs are representing Zimbabwe at the Brilliant Entre-preneur (BE) Programme in the Netherlands which started on Feb-ruary14 and ends on February 21.

The programme, which builds on women’s individual talents and offers intensive training, match-making as well as technical sup-port in business innovation, was conducted by the Brilliant Entre-preneur Program (BEP) in collabo-ration with ZimTrade, the Embassy of the Kingdom of the Netherlands (EKN) in Harare and the Nether-lands Enterprise Agency (RVO).

The aim is to create business link-ages for women entrepreneurs, thereby opening doors to new ideas, innovations and markets, among others.

Participants were drawn from var-ious sectors such as agriculture and processed foods, horticulture, fashion and design as well as the service industry.

ZimTrade chief executive Ms Sithembile Pilime commended the Embassy of the Kingdom of the Netherlands in Harare and the Netherlands Enterprise Agency for affording Zimbabwe such an opportunity.

“We welcome these synergies, they will assist us to unlock our potential. The programme

enhances entrepreneurial skills in molding businesses into innova-tive, socially responsible, sustain-able and profitable enterprises.

“We, therefore, challenge our women entrepreneurs to fully uti-lise this opportunity and tap into the expertise at their disposal,” said Ms Pilime.

According to the programme co-ordinators, the development of women entrepreneurs is crucial for heathy economic and social development. Women entrepre-neurs from Macedonia, Kosovo and Albania are already benefiting from the same programme.

.●

8 NEwS

20 local entrepreneurs take part in Brilliant Entrepreneur Programme

BH249

HARARE - The mainstream industrial index lost 1.92 (or 1,90 percent) on a week-on-week basis as economic funda-mentals remained unfavioura-ble.

Following today’s trades, the industrial index closed the week lower at 98.92 0.19 on

the back of losses in NatFoods, which eased $0.0500 to close at $2,5500 and cement pro-ducer PPC, which declined by $0,0300 to $0,7700 while Simbisa retreated $0,0020 to trade at $0,1420.

CAFCA also slid $0,0005 to set-tle at $0,2795.

Milk processor Dairibord and beverages giant Delta were unchanged at $0,0690 and $0,5200 respectively while activity was limited to six counters.

The mining index was steady at 18.74 points as Bindura, Falgold, Hwange and RioZim

maintained previous price levels at $0,0090, $0,0050, $0,0300 and $0,1040 respec-tively.

Week-on-week the mining index was unchanged

. - BH24 Reporter ●

ZSE10

Industrial stocks maintain downturn

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MovERS CHANGE TodAy PRICE USC SHAKERS CHANGE TodAy PRICE USC

PPC -3.75 77.00

NATFOODS -1.92 255.00

SIMBISA -1.38 14.20

CAFCA -0.17 27.95

INdEx PREvIoUS TodAy MovE CHANGE

INDUSTRIAL 99.11 98.92 -0.19 points -0.19%

MINING 18.74 18.74 +0.00 POINTS +0.00%

12 ZSE TABLES

ZSE

INdICES

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BH2413

14 dIARy oF EvENTS

The black arrow indicate level of load shedding across the country.

PowER GENERATIoN STATS

Gen Station

19 February 2016

Energy

(Megawatts)

Hwange 341 MW

Kariba 285 MW

Harare 17 MW

Munyati 28 MW

Bulawayo 0 MW

Imports 0 - 450 MW

Total 1355 Mw

—23 February 2015 - 38th Annual General Meeting of the members of Powerspeed Electrical Limited; Place: Powerspeed Board-room, Gate 1, Powerspeed Complex, Corner Cripps Road and Kelvin Road North, Graniteside, Harare; Time: 1100 hours

25 February 2016 - Extraordinary General Meeting (“EGM”) of the Shareholders of Radar Holdings Limited; Place: Tanganyika House, 6th Floor Boardroom, Harare; Time: 0900 hours...

25 February 2016 - The 49th Annual General Meeting of Mashonaland Holdings Limited; Place: The Boardroom, 19th Floor, ZB Life Towers, 77 Jason Moyo Avenue, Harare; Time: 1200 hours...

26 February 2016 - The Sixty-ninth Annual General Meeting of Ariston Holdings Limited; Place: Ariston Holdings Limited Main Boardroom, 306 Hillside Road, Msasa woodlands, Harare: Time: 14.30 hours:

THE BH24 dIARy

BH2415

JoHANNESBURG - South Africa's rand hovered close to the previous session's 7 week high on Friday, supported by renewed optimism about the outlook for the global econ-omy, while MTN led stocks lower a day after issuing a profit warning.

Analysts cautioned that the rand could resume the down-ward spiral triggered by the clumsy changing of finance ministers in December if next week's budget failed to convince investors that pru-dent fiscal policy remains intact.

At 0712 GMT, the rand traded at 15,3940 versus the dollar, up 0,1 percent from Thurs-

day's close in New York.

The local unit had climbed to its strongest level since late December during Thursday trade as receding fears of a global economic downturn boosted risk appetite.

Next week's budget poses a risk for the rand as Finance Minister Pravin Gordhan must juggle a series of conflicting

demands with limited reve-nue, against the backdrop of sluggish growth for Africa's most advanced economy.

"The rand may move closer to 15,00 stil l, but ahead of the budget next week ... upside may have become a bit com-pressed," Standard Bank said in a note.

"From a risk/return perspec-

tive, adding to long rand positions at this point does not add much value given the lingering event risk."

South African shares got off to a weak start, with the

Top-40 index down 1,1 per-cent while the broader all-share fell 0,8 percent soon after the market opened at 0700 GMT.

The losses were led by mobile firm MTN, which tumbled more than 13 percent after warning the previous day that its full year profit had likely fallen at least 20 percent.

Government bonds also weak-ened, and the yield for the benchmark instrument due in 2026 added 5 basis points to 9,135 percent. - Reuters●

REGIoNAL NEwS 16

Rand pauses, MTN leads stocks lower

Keillen Ndlovu

BH2417

European Centra l Bank Pres ident Mar io Draghi to ld European Union leaders that the b loc must preserve i ts powers to regulate f inanc ia l markets in a l l 28 member nat ions i f needed, accord ing to three European of f i c ia ls .

Dur ing negot iat ions of the UK’s membersh ip terms in the EU at a summit in Brus-se ls on Thursday, Draghi sa id the b loc ’s f inanc ia l markets wi l l remain inte-grated regard less of how Br i t i sh invo lvement in the un ion evo lves, sa id the of f i -c ia ls , who asked not to be named because the ta lks were pr ivate.

Br i ta in ’s re lat ionsh ip wi th the euro area ’s banking un ion is one of the key areas of debate at the two-day summit , where Br i t i sh Pr ime Min is ter David Cam-eron is t ry ing to secure a dea l that wi l l he lp h im win a re ferendum later th is year on whether to stay in the EU. The UK has sought to sh ie ld i ts banks f rom be ing bound by euro-area regu-lat ions, whi le France has pushed back that London f inanc ia l f i rms shouldn ’ t get

an unfa i r advantage f rom whatever dea l i s s t ruck

.-Bloomberg●

INTERNATIoNAL NEwS 18

draghi said to urge EU to keep broad powers to regulate markets

Mar io Draghi

BH2419

By Allan Akombo

Thinking of traversing Africa in search of trade and invest-ment opportunities? You may need to consider what parts of the continent to focus on in terms of flexibility in travel and how visa-open the desti-nation country is.

According to the Africa Visa Openness Report 2016 pub-lished by the African Devel-opment Bank (AfDB), the most visa-open countries are found in West Africa and East Africa. A massive 75 percent of countries in the top 20 most visa-open countries are in West Africa or East Africa.

Surprisingly, only one in North Africa and none in Cen-tral Africa are in the top 20 most visa-open countries—underlining the challenges the continent faces in boost-ing its trade and investment profile.

East Africa has the bulk (45 percent) of the top most visa-open countries includ-ing Burundi, Comoros, Dji-

bouti, Kenya, Rwanda, Sey-chelles, Somalia, Tanzania and Uganda.

West Africa has the second

largest cluster (30 percent) of the top most visa open countries including Burkina Faso, Cape Verde, Gambia, Guinea-Bissau, Mali and Togo,

according to the index.

The Southern African bloc is ranked third in terms of visa openness in four coun-tries that include Madagascar, Mauritius, Mozambique and Zambia.

Seamless borders are no doubt a boon to trade and investment world over because of free movement labor, goods and capital.

The fruits of an open visa policy have been supported by the formal adoption of the European Union (EU) Schen-gen Agreement in 1995 that abolished the EU’s inter-nal borders, enabling pass-port-free movement across most of the bloc.

The deal helped the Schen-gen countries to ramp up trade and investment among themselves thanks to an open visa policy. According to the Economist, every year peo-ple make 1,3 bill ion crossings of the EU’s internal borders along with 57 million trucks carrying €2,8 tril l ion ($3,7

20 analysis20 ANALySIS

Integration: Most visa-open countries are found in East and west Africa

21 analysis21 ANALySIS

tril l ion) of goods.

“Yet Africa largely remains closed, with Africans stil l needing visas to travel to over half of the continent. These headlines go against the continent’s goal to truly become ‘one Africa.’

And stil l we know that it is the free movement of people, together with the free move-ment of goods, services and capital, which is the lifeblood that will sustain Africa’s inte-gration,” Akinwumi Adesina, President African Develop-ment Bank Group says.

At the November 2015 EU-Af-rica Vallet Summit, African leaders committed to support migration initiatives across the continent to help spur trade and investment within the continent.

“The vision for Africa set out in Agenda 2063 and its call to action urge the creation of an African passport and an end to visa requirements for all African citizens in Africa by

2018.

Time is running out to meet that pledge,” Dr Adesina said following the launch of the Visa Openness Report.

Several African countries have made major strides in adopting the open visa policy through a number of smart solutions that have yielded huge returns.

For example as a result of opening up their borders, countries such as Seychelles, Mauritius and Rwanda have seen a big impact on tourism, investment and financial ser-vices.

As part of its growth agenda by 2063, the African Union (AU) set a goal to be conti-nent with seamless borders” where “the free movement of people, capital, goods and services will result in signif-icant increases in trade and investments amongst African countries rising to unprece-dented levels, and strengthen Africa’s place in global trade.”

“Greater visa openness is a vital part of the solution in getting Africa to reach that vision.

There is a strong business case for visa openness in Africa, which in turn promotes the free movement of people and is at the foundation of deeper and closer integration of the continent,” AfDB said.

“There are huge potential gains to be had for countries and regions across Africa in having more visa-open policies for other Africans. That holds true whether it is to help plug skills gaps in the labour market, promote entrepreneurship, diversify the economy, add value to services, or whether it is to attract investment and boost competitiveness” it added.

The open visa policy is expected to have more rele-vance ahead of the planned merger of three African economic blocs into a new 27-nation free-trade zone.

A deal signed by Heads of States in Cairo in June 2015 targets to combine the Com-mon Market for Eastern and Southern Africa (Comesa), the Southern African Devel-opment Community (SADC), and the East African Commu-nity (EAC).

This will create a free trade union capturing more than 60 per cent of the continent’s economic activity and inves-tors will easily reach a mar-ket of 625 million consumers from South Africa to Egypt. The tripartite FTA popularly known as the grand Free Trade Area will be the largest economic bloc on the conti-nent and the launching pad for the establishment of the Continental Free Trade Area (CFTA) in 2017, Comesa said in a statement in 2015.

Although African economies are growing fast, second only to Asia, the continent has attracted criticism over its slow pace of integration. – AFK Insider●