BH24 Reporter

HARARE – The Zimbabwe Stock Exchange’s official list has just dwindled to 62 listed firms after the bourse announced today the scratching of Pelhams and Radar Holdings from the list.

Earlier this month, the ZSE also removed Phoenix Consolidated from its official list.

ZSE chief executive officer Alban Chirume said the bourse’s hand had been forced by Pel-hams’ failure to hold Annual General Meetings and publish audited financial statements for 2014 and 2015.

It also failed to settle its listing fees arrears for 2014 and 2015.

Pelhams applied for voluntary suspension on November 26, 2015 following its placement under Provisional Liquidation on November 18, 2015.

And trading in Pelhams’ shares on the ZSE was suspended December 10, 2015.

“Pursuant to paragraph 1.8 (a) of the ZSE Listings Require-

ments, Pelhams was obliged to continue to meet its continuing obligations during the suspen-sion period. Pelhams failed to hold Annual General Meetings and publish audited financial statements for 2014 and 2015. Pelhams also failed to publish quarterly updates as required and is yet to settle its listing fees arrears for the aforemen-

tioned years.

“The ZSE initiated the termina-tion of listing of Pelhams on the basis of the issuer’s non-com-pliance with the ZSE’s Listings Requirements. Pelhams acceded to the ZSE’s resolution to final-ise the termination process,” said Mr Chirume in a notice this morning.

In the same notice, the ZSE also said Radar Holdings will be removed from the ZSE official list with effect from today.

Radar applied for voluntary termination on 6 October 2015 pursuant to paragraph 1.7 of the ZSE Listings Requirements. Radar minority shareholders approved the termination of listing in an Extraordinary

News Update as @ 1530 hours, Friday 29 April 2016

Feedback: bh24admin@zimpapers.co.zwEmail: bh24feedback@zimpapers.co.zw

ZSE official list dwindles to 62

General Meeting held on 25 February 2016

“Approval was received for the termination of Radar’s listing from the Securities and Exchange Commission of Zimbabwe, pursuant to Section 64 (a) (i) of the Securities and Exchange Act [Cap24.25],” said

ZSE.

The market has seen its fair share of new listings and de-listings. From last year to date, the ZSE witnessed three new entrances namely Get-Bucks, Proplastics and Simbisa. The latter two listed by way of introduction as they were

results of dividends in specie by their former parent companies Masimba and Innscor, respec-tively.

Besides the above-men-tioned,there were also some de-listings as a result of offers by majority shareholders to minorities in ABCH and Astra.●

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Zambian president commends Zim productsBH24 Reporter

HARARE - Zimbabwean products shone during the Agritech Expo in Zambia recently, with Zambian president Edgar Lungu com-mending Zimbabwean firms for their local products, ZimTrade has said.

“During his tour of the Zimba-bwean Pavilion, the Zambian president applauded Zimbabwe for supporting regional trade through participating in shows such as the Agritech Expo.

“He further commended Zimba-bwean companies for adapting their products, which included tractor-drawn farming imple-

ments, agricultural inputs and irrigation equipment, to the specific needs of small-scale farmers,” said ZimTrade in a statement following its participa-tion at the expo.

According to Trade Map, Zambia imported agricultural equipment worth $15, 3 million in 2015, with the main supplying markets being South Africa (45 percent), Brazil (9 percent) and China (8 percent).

However, Zimbabwe’s contri-bution was 3 percent and this presents a huge potential for local companies to increase exports to Zambia as they enjoy distance advantage over other

competitors. Zimbabwean companies, who were facilitated by ZimTrade to participate at the Expo, expressed optimism on prospects of making in-roads in the Zambian market.

Arthur Garden Engineering mar-keting manager Mr Itayi Kureya thanked ZimTrade for the role it is playing in assisting local com-panies to promote their products through participation in special-ised exhibitions.

“Through the expo, we managed to establish contacts and gain useful information that will help us to develop and grow our busi-ness,” he said..●

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TAA:DI251386-Y22

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By Funny Hudzerema

HARARE -The new transfer pricing tax regulations prom-ulgated by Government are going to provide guidance on how cross border transactions will be viewed by revenue authorities and improve their tax payment, a tax advisor has said.

Zimbabwe enacted new legis-lation on transfer pricing that took effect on January 1, 2016 and its provisions augment the current anti-tax avoidance sections of the Income Tax Act.

The new rules govern domestic transactions between associ-ates as well as transactions with foreign entities.

Ernst and Young business and tax advisory executive director Mr Rameck Masaire said the new pricing regulation will go a long way in assisting both tax authorities and business people to manage their taxes.

“The new tax regulations will provide guidance clarity on how cross border transactions will be viewed by the revenue authority. In terms of taxes that are paid locally they are not losing out they are not missing transactions.

“Government also wants to make it clear that when cross border transactions are entered into people are clear on what they are supposed to do,” he said.

He was speaking at a stake-holders seminar organised by Ernst and Young on the issue of the new transfer pricing legislation.

“Even when business organi-sations are entering into busi-ness strategies they need to be clear on the issues of cross boarder in terms of taxes and how they will deal with the revenue authorities.

“Business authorities should start looking at the regula-

tions and come up with clear producers as entities to make sure that they are ready when revenue authorities come with business,” he said.

He added that new legisla-tion is a specific rule that the revenue authority will use in verifying the pricing of goods and services between parties concerned.

The legislation will allow the Zimbabwe Revenue Authority (ZIMRA) to be able to adjust transactions which are not in line with the arm’s length prin-ciple, and might create a tax liability for taxpayers.

The new legislation applies to international and local trans-actions between connected persons.

The transfer pricing rules are aligned with the guidelines of the Organisation for Economic Co-operation and Develop-ment and the United Nations Manual.●

New transfer pricing tax regulations to improve tax payment

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HARARE-A high powered delega-tion from Russia led by Industry and Trade Minister Denis Manturov is in the country today for the sec-ond session of the Zimbabwe-Rus-sia Intergovernmental Commission meeting.

The first session of the Zimba-bwe-Russia Intergovernmental Commission on Economic, Trade, Scientific and Technical Coop-eration was held in Harare last September.

In a statement, the Ministry of Foreign Affairs said the delegation from the Russian Federation would attend the on–going Zimbabwe International Trade Fair in Bula-wayo.

“Honorable Manturov is expected to arrive in the country on 29 April 2016 in Bulawayo in the morn-ing. He will attend the Zimbabwe International Trade Fair where the Russian Federation is also exhibiting. He will travel to Harare in the evening of the 29th of April,” it said.

Senior officials from the two countries started meeting on April 28 this year in preparation for the joint commission.

“The senior officials are prepar-ing for the Intergovernmental Commission meeting by reviewing the status of implementation of the agreements the two countries signed in September 2014.

“They would also propose meas-ures to increase momentum in the implementation of projects that may be lagging behind, and identify possible new areas of cooperation,” said Foreign Affairs.

The Ministry said the Commission expected to build on the excellent bilateral political relations between the two countries and co-operation in a number of areas, including trade and investment, mining, energy, home affairs, tourism and higher education.

At last year’s meeting, Russia expressed its commitment to assist Zimbabwe navigate her economic recovery efforts through

increased investment in various sectors of the economy.

Russia’s interest in investing in Zimbabwe follows that of China which has already started imple-menting various infrastructural projects and has signed numerous agreements to invest in different sectors of Zimbabwe’s economy including energy, mining and the telecommunications sector.

A member of BRICS grouping of emerging economies in the world which includes Brazil, China, India and South Africa, Russia will be implementing a $1 billion platinum mining project in Darwendale through a joint venture partner-ship between investors from that country that include VPB Bank and Rustec, and the Zimbabwe Mining Development Corporation.

Russia, the sixth largest economy in the world, has in recent years increased its mining interests in Zimbabwe where it is already exploiting gold and diamonds.

.- New Ziana.●

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Russian delegation jets in for second Joint Commission

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BH24 Reporter

HARARE -The Zimbabwe Revenue Authority may frus-trate efforts to formalise the informal sector if the taxman continues to demand high taxes on newly registered entities, a Cabinet Minister has said.

Small, Medium and Co-oper-ative Development Minister Stembiso Nyoni said Gov-ernment should procure 25 percent of its supplies from SMEs to support growth of the sector, which now employ and sustain the majority of people in the country,.

However, the minister stressed the need to ensure that the SME’s sector, which is predominantly made up of unregistered entities, formal-ize since Government cannot contract informal entities.

Addressing delegates to the annual business confer-

ence of the 57th edition of the Zimbabwe International Trade Fair this week, she said 70 percent to 75 percent of the SMEs were not regis-tered.

The Minister said that the revenue collector must not hound SMEs that come for-ward to be registered and drive them back into hiding, as it has recently pounced on the ones that had formalized.

She said in one instance the tax collector had instantly demanded $154 000 from newly registered SMEs in Gweru, which was eventu-ally whittled down to $50 000 after some protracted discussion.

“Zimra need to accompany and make sure they do not go back, SMEs said that once they formalised, Zimra pounces,” she said.

“They say what is this, if

formalisation means this it is we have to hide?”

She said the SMEs must be the ultimate beneficiaries of the formalization initiative and should be given recog-nition as participants in and part of inclusive process towards economic growth.

Minister Nyoni challenged established corporates to take a cue from what food processor Cairns Holdings is doing to support SMEs by organizing them and con-tracting small farmers for raw materials.

Further, the minister said supporting growth of the SMEs, was President Mug-abe’s vision, which he supported by dedicating a fully-fledged ministry led by a Cabinet minister to pro-mote the SMEs.

As such, she said the for-malization of the informal

sector to grow SMEs was a collective effort, which must see all stakeholders working hand in glove to foster devel-opment of the entities.

The minister said the Minis-try of Local Government and Urban Development should facilitate growth of SMEs by proving workspace to enable them to thrive and not close down informal SMEs.

The financial services sector, she said, must also play its part by developing finan-cial instruments tailor made for the informal sector and upcoming SMEs, which are different from those of big firms.

Minister Nyoni said SMEs should be regarded as a blessing, as they create jobs and sustenance for millions, and not a curse to the coun-try.●

Govt urged to support SMEs

11 NEws

Dr Daniel Shumba

BH2412

HARARE -The local equi-t ies market c losed the week without a s ingle dip, post-ing i ts e ighth consecut ive gain today to gain 6.51 on a week-on-week basis.

The mainstream indus-tr ia l index added 3.04 to c lose the week at 105.79 as s BAT was up by a s ig-ni f icant $0,9524 to c lose at $11,7524, whi le bever-ages giant Delta shi f ted up $0,0475 to $0,7000 and giant retai ler OK Zimbabwe advanced by $0,0039 to trade at $0,0450.

Conglomerate Innscor was $0,0012 stronger at $0,2200.

Two counters traded in the negat ive as Hippo shed $0,0150 to $0,2200 whi le

g iant insurer Old Mutual c losed at $2,2000 after a $0,0026 loss.

The mining index was f lat at 20.16 as Bindura, Fal-gold, Hwange and RioZim al l maintained previous pr ice levels at $0,0102, $0,0050, $0,0300 and $0,1100, respect ively.

Week-on-week, the mining index was unchanged

- BH24 Reporter ●

ZsE13

Equities market close week on a high

BH2414

MovERS CHANGE TodAy PRiCE USC sHAKERs CHANGE TodAy PRiCE USC

OK ZIM 9.48 4.50 HIPPO -6.38 22.00

BAT 8.81 1,175.24 MASHONALAND -0.59 1.67

Delta 7.27 70.00 OLD MUTUAL -0.11 220.00

INNSCOR 0.54 22.00

OK ZIM 0.24 4.11

PPC 0.16 65.00

iNdEx PREvioUS TodAy MovE CHANGE

INDUSTRIAL 102.75 105.79 +3.04 points +2.96%

MINING 20.16 20.16 +0.00 POINTS +0.00%

15 ZsE tABlEs

ZsE

iNdiCES

Stock Exchange

Previous

today

16 diARy oF EvENTS

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

PoWER GENERATioN STATS

Gen Station

25 April 2016

Energy

(Megawatts)

Hwange 509 MW

Kariba 459 MW

Harare 30 MW

Munyati 18 MW

Bulawayo 22 MW

Imports 0 - 400 MW

Total 1494 MW

• African Sun EGM, Holiday inn, 09 May, 1400hrs,

• innscor EGM, Royal Golf Club, 10 May, 0900hrs

• 05 May - Barclays Bank of Zimbabwe AGM; Place: Meikles Mirabelle Room; Time: 1500hrs• 18 May - ZB Building Society AGM; Place: 21 Natal Road, Avondale, Harare; Time: 12:00hrs

• 18 May - The 76th AGM of Astra industries Limited; Place: Auditorium at Astra Park, Corner Ridgeway North/Northend Roads, Highlands, Harare; Time: 12:00hrs

• 19 May - The Fifth Annual General Meeting of Padenga Holdings Limited; Place: Royal Harare Golf Club, 5th Street exten-sion, Harare; Time: 08.15am

• 19 May - NMBZ AGM; Place: Unity Court, Corner 1st Street Kwame Nkrumah Avenue; Time: 10:00am

• 19 May - Turnall Holdings AGM; Place: Jacaranda Room, Rainbow Towers; Time: 12:00

THE BH24 diARy

JoHANNESBURG - South Africa's rand firmed against the dollar early on Friday, holding on to a one-week high buoyed by risk appetite after a string of disappoint-ing data releases from the United States.

At 0708 GMT, the rand traded at 14.2015 per dollar, 0.58 percent stronger from Thurs-day's New York close.

Since the previous session, the currency has been trad-ing at its firmest levels since April 21 as the dollar faded after economic growth in the U.S. braked to its slowest in two years.

The weak growth figures came after the U.S. cen-tral bank on Wednesday left its benchmark lending rate unchanged and suggested it was in no hurry to tighten monetary policy, cheering global risk appetite in the process.

"The rand rally is getting going again, but to acceler-ate it needs ongoing support from the dollar, larger capital

flows and a break through key levels," said Rand Market Bank currency strategist John Cairns in a note.

"The dominant issue in the rand outlook remains the dollar. Today’s event risk on this front comes from U.S. personal income and spend-ing data this afternoon."

Locally, focus was on March trade data due at 1200 GMT.

Government bonds also strengthened, with the yield for the benchmark instru-

ment due in 2026 falling 5.5 basis points to 8.990 per-cent.

On the bourse, the Top-40 fell 0.5 percent in early trade. - Reuters.●

REGioNAL NEWS 17

Rand firmer on risk appetite, eyes on local trade data

JoHANNESBURG - Growth in private sector credit demand in South Africa slowed to 8.94 percent year-on-year in March from 9.02 percent in February, central bank data showed on Friday.

Expansion in the broadly defined M3 measure of money supply was at 10.30 percent year-on-year in March, slightly up from 10.25 percent in Febru-ary. - Reuters

- Bloomberg●

SA’s March credit growth slows to 8.94 pct year-on-year

SiNGAPoRE - Crude oil prices fell in early trading on Friday as a looming rise in Middle East output may drag on the stronger markets seen in April, although falling U.S. production and a weaken-ing dollar are stil l offering support.

International benchmark Brent crude futures were trading at $47.92 per barrel at 0236 GMT, down 22 cents from their last close.

U.S. West Texas Intermedi-ate (WTI) crude futures were down 18 cents at 45.85 a barrel.

Both contracts remained near 2016 highs of $48.19 and $46.14 per barrel respec-tively, and WTI's smaller fall was a result of declining U.S. crude output, traders said.

Despite Friday's dips, Brent and WTI are up almost a third from April troughs and are over 75 percent above their 2016 lows, lifted by falling output and a weaker dollar, which has fallen almost 6 percent against a basket of other leading cur-rencies this year.

But Deutsche Bank said that a looming rise in production by members of the Organiza-tion of the Petroleum Export-ing Countries (OPEC) - with climbing Iranian output and following outages in Iraq, Nigeria and the United Arab Emirates - could cap recent oil price rises.

"A sustainable rise in OPEC production may be just around the corner, and ...

the rally may pause," the bank said in a note to cli-ents.

"Maintenance in the UAE at fields ... is scheduled to end in April, implying a rise from current production of 2.73 million barrels per day (bpd) to the previous 2.91 million bpd production rate in May," Deutsche said.

For 2017, the bank said it expected to be around 33.1

million bpd, "with upside risks originating from Libya and Saudi Arabia, and down-side risks from unplanned outages and spending cuts in Iraq".

One of the main repercus-sions of the global oil price rout between 2014 and early 2016 has been a deep economic crisis in crude export-reliant Venezuela, where political risk consul-tancy Eurasia Group said the government faces default as the state runs out of cash to keep the oil pumps running.

"The government needs to invest about $15 bill ion per year to maintain current production (2.4 million bpd), and mounting problems will probably lead to a decline of 100,000-150,000 bpd this year," Eurasia Group said.

"Barring a meaningful recovery in oil prices or fresh loans from China in the second half of the year, scarce foreign exchange will probably force the state to default later this year, most likely in the fourth quarter," it added. – Reuters.●

iNTERNATioNAL NEWS 18

oil prices dip on looming oPEC production rise

By Papa Ndiaye

Conversations about Africa typically focus on growth rates and the pace of emergence of the middle class. Meanwhile, African entrepreneurs have evolved in their sophistication and approach to business, far outpacing, in fact, the growth and market opportunity that even optimistic macroeconomic numbers may suggest.

For that reason, when consid-ering African private equity, it is critical to focus not only on topline, top-down analyses of opportunities, but to focus more on the evolution and needs of African entrepreneurs.

African entrepreneurs are increasingly embracing glo-balisation, as they strive to stay globally competitive, but locally relevant. These entre-preneurs continue to tailor their strategies to the realities of today's Africa, instead of simply "cutting and pasting" foreign methods.

Driven by the desire to become

even more competitive, African businesses have increasingly shifted, over the past dec-ade, from simply trading, to local production of goods and services of comparable or even better quality than their imported peers. The African entrepreneur is progressively coming of age. There are indeed still many opportunities for import substitution in Africa, which if tapped, could serve as an engine for the next level of growth on the continent.

Today, when one speaks to a Ugandan or Rwandan busi-nessperson whose business is gaining market share locally, her ambition is to quickly serve the Kenyan market, and increasingly the Ethiopian mar-ket. This was not the case over a decade over.

On the back of the progress made with regional integra-tion in the past decade, and the opening of new frontiers, entrepreneurs now see regional expansion as a necessity, and not a luxury. This partly

explains the rapid regional deployment of banks such as Equity Bank in East Africa, BGFI in Central Africa, and most notably Ecobank throughout the continent. A growing trend is also one of cross-regional integration, where regional champions in East Africa look to move west or south towards ECOWAS and SADC, and vice versa. We are already seeing Moroccan groups moving from the Maghreb into West and Central Africa.

The difficulties faced by entre-preneurs in accessing debt financing have made them obsess more about getting funding, than thinking about their business. This limits the time they spend on crucial needs of the business, includ-ing good governance - which cannot be narrowed down to just corruption - proper finan-cial controls, increasingly solid and adapted technology, and good quality and well-managed human resources, which is fundamental to their business growth.

Research and development is also rapidly joining this list of success factors, as Afri-can entrepreneurs have to go beyond "cut-and-paste" from other markets, and enter the regional market. So do gov-ernance, which has become increasingly pertinent for suc-cessful African entrepreneurs to avail themselves to thoughts and contributions from well-se-lected boards of directors to supplement any shortcomings a brave entrepreneur is likely to have.

In their initial years, African entrepreneurs tend to see financial management as an annoying impediment to run-ning a company, and getting access to new markets. With limited human resources, entrepreneurs tend to focus on everything except this.

We all know this tends to turn any success into a nightmare, because by the time the entre-preneur decides to address this issue, the company's DNA has already been set, and it takes

19 analysis19 ANALySiS

Private Equity's African Time

more work to undo the DNA than to establish it from the start. In this context, private equity funds, if not properly managed could actually be part of the problem, as they provide the entrepreneur with what could likely be the largest amount of unsecured capital he would had received in the company's young life, and this can therefore lead to high levels of wastage, as they are more accustomed to getting funds with often unfairly strict covenants.

Technology is today's most delicate and unused source of potential competitive advantage for most African entrepreneurs who see this as a luxury for more sophisticated businesses. On one hand, it is true that understanding technologi-cal trends does require a fair amount of sophistication; on the other, positive and rapid changes in technology can be harnessed by African entrepre-neurs to enter other continents, as seen in the case of mobile money and the proliferation of

prepaid GSM platforms.

This process is being aided by African governments investing in basic infrastructure, work-ing with the private sector to increase reliability of power and Internet bandwidth, which are great enablers in the develop-ment of local technology hubs. We have seen the emergence of a vibrant technology space in Kenya since the landing of the Seacom fibre in 2009, and in Senegal, following Orange fibre optic. We expect sustained momentum in this area, with the expansion of fibre compa-nies such as Main One.

Most African entrepreneurs will tell you that their people are their greatest assets. This statement in many ways con-tradicts what is witnessed when one visits some companies, sees how people are treated, and the human resource poli-cies in place (or not!). Entre-preneurs or teams with a deep understanding of local context - either through family ties, deep roots and local education - have a greater chance of success

than those that do not.

The topic of growing African entrepreneurs is vast, and a few paragraphs cannot do it justice. This is a topic we can-not afford to ignore, as it will be the linchpin of any sustaina-ble growth in Africa.

We all know that improved eco-nomic prospects are the best way to enhance social cohe-sion that ultimately will lead to political stability and better-en-trenched democracy.

The challenges of African entrepreneurship are multidi-mensional. It will therefore be unrealistic for private equity funds to view themselves as the only solution. As a result, it is critical for private equity funds to stop operating in what some see as a bubble, and integrate into the fiber of the economies that it serves.

This involves joining business groups to lobby for a better business environment, including keeping an eye on local politics without being an active partic-

ipant; effectively joining forces to affect change in the envi-ronment in which we invest. That is why organizations such as the Africa Venture Capital Association (AVCA) and other more local emanations are faced with the challenge, but at the same time should enjoy the opportunity to spread the word. We are now doing just that in Addis Abeba this week, bringing hundreds of investors composed of local and regional players who represent AVCA membership with combined assets of approximately 1.5 tril-lion dollars.

Ethiopia is one of the largest countries in Africa, with the highest economic growth rate and the most dramatic trans-formation over the last decade. As such, it cannot be ignored. Even more, it has to be courted. – Addis Fortune●*Papa Ndiaye is the founder and chief executive officer of Advanced Finance & Investment Group.

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