'Zim to Miss Growth Targets': Page 5
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‘Zim to miss growth targets’: Page 5 $4 News Worth Knowing Hwange seeks new concessions: Page 7 May 9-15 2019 ESTABLISHED 1969 @ FingazLive www.fi ngaz.co.zw Facebook: The Financial Gazette ZSE Report The All Share Index added 1,19 per- cent on Wednesday to close at 138,89 Economic points. Innscor gained $0,1195 to close at $1,8520, while Delta rose by $0,0501 to end at $2,8502, and African Sun traded $0,0247 higher at $0,2747. The Industrial Index was up by 1,21 percent to close at 464,22 points, while the Top 10 Index gained 1,17 percent to close at 132,27 points. The Minings Index lost 0,41 percent to settle at 183,35 points. prospects Currencies (Bloomberg) % change USD:ZAR 14,3997 0,23 ◀ ◀ ◀ EUR:USD 1,11202 0,10 GBP:USD 1,3007 0,52 USD: JPY 110,0900 0,15 Stock Markets ZSE (All Share) 138,89 1,19 ZSE (Minings) 183,35 0,41 ◀ ◀◀ ◀ JSE 14,699,00 0,27 ◀ get worse 7 241,98 0,25 FTSE 100 0,15 Dow 25 965,09 ◀ Commodities ◀ Gold 1 287,50 3,07 0,37 Platinum 867,17 ◀ 0,26 Brent Oil 69,70 ◀ Grains (Grain SA) White Maize ZAR 2 020,22 ◀ 2.2 ― experts Soya ZAR 4 333,95 ◀ 1.6 Wheat ZAR 2 269,31 ◀ 0.1 Adelaide Moyo and Omega Ukama goods ... it will be disastrous if the crisis con- Staff Writers tinues,” economist John Robertson chipped in. “Most workers will have to be retrenched ‘Take advantage IMBABWE’S economy is haemorrhag- and consumer demand will fall further,” he of media reforms’ ing at an alarming rate, with experts said. Zsaying that all key indicators suggest “The exchange rate is a very destabilising MODUS Media (Modus) ― a very challenging future for both businesses element in the mix of uncertainties facing the publishers of The Financial and hard-pressed consumers. economy. Although the central bank claims Gazette (FinGaz) ― must take This comes as the International Monetary that this is stabilising — at around one to 3,1 advantage of the opened air- Fund (IMF) has projected that the country’s — nothing is happening that will prevent it waves and expand its portfolio, gross domestic product (GDP) will shrink by from weakening further,” he added. Information minister Monica 5,2 percent this year — signifi cantly down Robertson also said of equally grave con- Mutsvangwa has said. from its initial growth forecast of 4,2 percent. cern was the two percent electronic transac- This comes as President The gloomy outlook also comes as the tion tax that was imposed by Finance minister Emmerson Mnangagwa’s ad- Confederation of Zimbabwe Industries (CZI) Mthuli Ncube, coupled with the multiple fuel ministration has made a com- has forecast that industry capacity utilisation taxes which were eroding workers’ incomes. mitment towards media plural- will further decline to 34,3 percent this year — “The pay increases being granted to public ity, diversity and freedom, and down from 2018’s 48,2 percent. sector workers will not match the increases in has licensed several players, “If the policy direction does not change, consumer goods prices,” he said. mainly in broadcasting. this is what industry expects in 2019,” Tafadz- What was also worsening Zimbabwe’s cri- “As government, we sin- wa Bandama, CZI’s chief economist, told The sis, Robertson added, was the fact that inves- Securities and Exchange Commission of Zimbabwe chief execu- cerely hope Modus will take Financial Gazette. tors were reluctant to commit their capital in tive Tafadzwa Chinamo at The Financial Gazette’s Golden Jubilee advantage of the opening of “The economy is shrinking right now and Zimbabwe. celebration dinner in Harare last week. The commission is cur- the airwaves to grow its media the 2019 growth fi gure is indeed likely to be “The many investors who are said to be rently pushing for amendments to the Securities and Exchange portfolio and create jobs for minus fi ve or six percent. Many factories are interested are all waiting for government mea- Act to enhance the country’s capital markets, unlock value as well thousands of our young people unable to obtain raw materials to manufacture To Page 2 as improve investor protection. Picture by Freedom Mashava To Page 3 Page 2 | May 9-15 2019 The Financial Gazette National News Economic prospects get worse: Experts From Page 1 knock on effect on disposable incomes, foreign sures that will improve the investment environ- currency generation and overall growth,” he said. ment,” Robertson said. Mlotshwa added that while “creating the in- And consistent with the CZI’s gloomy out- terbank market was a step in the right direction, look, Unilever Zimbabwe has said that its pro- the idea might be stalled by the solvency of cor- duction capacity has hit an all-time low due to a porates with foreign currency liabilities, but don’t lack of foreign currency to secure raw materials. have a strong export component in their revenue”. Likewise, refrigerator maker Imperial & “The authorities should also allow the inter- Commercial Refrigeration says it is operating at bank market to float to a realistic level that en- below 10 percent capacity as most of the com- courages those same exporters to trade their ex- pany’s major clients are reeling from foreign ex- cess forex formally and transparently, as opposed change shortages. to pushing them to a more attractive parallel mar- On the other hand, blue chip counter Delta ket rate,” he said. Corporation (Delta) said recently that “the fiscal In its latest financials, Proplastics — one of and monetary policies implemented between Oc- Zimbabwe’s largest piping products manufac- tober 2018 and February 2019 have significantly turers — also said foreign currency remained a altered the trading environment”. major challenge. “Of particular note is the two percent trans- Its chairman, Gregory Sebborn, said although action tax, the adoption of the local currency the company welcomed the recent changes un- (RTGS$) as the functional currency and the in- veiled in the February monetary policy statement, troduction of an exchange rate of the RTGS$ to it was yet to see the impact of this with regards the US dollar,” it said. to stimulating business performance and easing “The value of RTGS$ deposits continues to foreign currency bottlenecks. be eroded by the fast depreciating exchange rates “The operating environment remained very and cost push inflation,” Delta, one of the coun- challenging throughout the year,” he said in the try’s largest taxpayers and beverage maker, said. company’s financial results for the year ended On its part, financial advisory firm Morgan & December 31, 2018. Co recently said it now saw a state of “pareto op- But Eddie Cross, an economist who has been timality” in the broader economy — an economic optimistic about the 2019 outlook, is now blam- state where resources cannot be re-allocated to Gregory Sebborn Eddie Cross ing the central bank for “retarding” the economy. make one individual better off without making at “The reserve bank actually is responsible for least another individual worse off. sumer purchasing power,” Morgan & Co said. as businesses has pushed the costs to final con- much of the inflation in the market at present and “This implies that it is almost impossible to ef- “We contend that there has been a transfer of sumers,” Morgan & Co said last week. is therefore responsible for retarding economic fect a change in economic policy without making wealth from the general populace to the govern- Meanwhile, Lloyd Mlotshwa of advisory firm recovery and stability even though the economic at least one economic agent worse off,” it said. ment. For companies, the implication has been an IH Securities says Zimbabwe is “effectively in a fundamentals are now stable and sound,” he said. “The increase in fuel prices and the introduc- increase in the cost of production,” the research recession” already. [email protected] tion of the two percent tax has made the general firm said. “Early signals suggest that output will be populace worse off given the contraction in con- “The net effect is a general increase in prices lower relative to last year, which has a negative See also comment on Page 8 Chloride eyes regional markets Tabitha Mutenga Currently, Chloride is exporting 30 percent of Features Editor the 30 000 batteries manufactured every month to Zambia, Malawi, Mozambique and Botswa- HLORIDE Zimbabwe (Chloride) says it na, with expansion plans in Namibia and South will be increasing its exports to 50 percent Africa. Cfrom the current 30 percent as it seeks to “We want to push it to 50 percent because we expand its regional presence by manufacturing 50 have a very strong export drive to support the re- 000 batteries per month. quirements of the country and our own require- The company, wholly owned by ART Corpo- ments and Zambia is our company’s biggest mar- ration, specialises in manufacturing and distribu- ket taking in about 6 000 batteries every month, tion of lead acid batteries under the brands Exide which is about 60 percent of the company’s ex- for the automotive market and Chloride for stand- ports. by and motive market. “We know we can supply the Zambian market Kudzielister Pasipanodya, Chloride's general size of 25 000 per month and we are only at 6 000 manager, said the company has capacity to meet so we want to grow that market since we are the the country’s battery demand of 30 000 per month biggest in terms of market share in Zambia, we as it has installed capacity of 35 000 batteries.