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1. By Tawanda Musarurwa
HARARE -The Reserve Bank
of Zimbabwe last week
announced financial sec-
tor compliance credits in line
with the new Frameworks,
Procedures and Guidelines for
implementing the Indigenisa-
tion and Economic Empower-
ment Act that were promul-
gated last month.
Said RBZ governor Dr John
Mangudya during the pres-
entatio of the 2016 Monetary
Policy Statement last week:
"Following the gazetting of
the Notice on Frameworks,
Procedures and Guidelines
for implementing the Indi-
genisation and Economic
Empowerment Policy, it is
imperative that the Bank pro-
vides an in-depth illustration
of the operationalisation of
the guidelines as they relate
to the empowerment cred-
its or quotas that contribute
towards the 51 percent indi-
genisation threshold as is
News Update as @ 1530 hours, Monday 08 February 2016
Feedback: bh24admin@zimpapers.co.zwEmail: bh24feedback@zimpapers.co.zw
'Financial sector indigenisation measures to spur economic growth'
Dr John Mangudya

2. required by law under Section
3(5) of the Indigenisation and
Economic Empowerment (IEE)
Act and Section 5(4) of the
IEE Regulations."
In terms of the pronounced
financial sector compli-
ance credits, one of the key
"socially and economically
desirable objectives" will see
affected financial institutions
lending to the agriculture
and/or energy sectors, at
least 20 percent of the finan-
cial institution’s total loan
portfolio.
This will earn the financial
institution an empowerment
credit/quota of 8 percentage
points.
The other the socially and
economically desirable objec-
tives include Lending to small,
medium and micro enterprises
(SMMEs), lending to low cost
housing, preferential local
procurement and lending to
women programmes, among
several others.
"Levels of some of the sub-
heads are still being final-
ised," said the governor.
Observers contend that the
measures announced by the
central bank have the positive
effect of driving broader eco-
nomic growth.
"The measures encourages
banks to participate in sec-
tors of the economy that spur
economic growth taking into
account the indigenisation
framework," said MBCA in a
note.
Dr Mangudya said the alter-
native to the above is for an
institution to comply through
"pathway 2" of rebate earn-
ings deductible from the
compliance and empower-
ment levy as presented in the
Gazette, General Notice 1 of
2016.
Although the empowerment
levy has been met with mixed
feeling, Government has
maintained that it is a key
tool ensuring full compliance
to the indigenisation pro-
gram.
The proposed tax, if approved,
will see companies that have
foreign shareholding pay the
levy from their gross reve-
nues, but this will be mod-
erated to a maximum of 100
percent on the basis of speci-
fied rebate earnings.●
2 news

3. BH243

4. By Funny Hudzerema
HARARE - Finance and Eco-
nomic Development Minis-
ter Patrick Chinamasa has
announced the new Zimbabwe
Stock Exchange board and
called on it to finalise a num-
ber of issues which the old
board failed to achieve.
He said the new board should
develop new products which
protects local companies from
delisting from the ZSE.
“The incoming board should
consider the finalisation of
the demutualisation exercise
which includes registration
of new entity and transfer
of assets and liabilities from
the existing entity to the new
entity.
“The group should come up
with new product develop-
ment such as the Zimbabwe
Emerging Enterprising Market
for small to Medium enter-
prises intending to list in the
country’s secondary bourse
and revival of bond market
aimed at bringing more long
term capital to the local mar-
ket to ease tight liquidity sit-
uation,” he said.
The new ZSE board will be
chaired by Mrs Caroline San-
dura she comes from the
stock brokers after Mrs Eve
Gadzikwa’s term expired while
Mr Alban Chirume will remain
as the chief executive.
“We appreciate the develop-
ments which were done by
the old board to develop a
comprehensive five year stra-
tegic plan and which subject
to implementation and we
are hoping that that the new
board will be able to imple-
ment that strategic plan.
“The main aim of the strate-
gic plan is to transform the
stock exchange to make it a
world class stock exchange,”
he said.
He added that the new board
should reduce the trading
costs at the ZSE. At least 32
percent of the board mem-
bers are from the Government
while the rest are stock bro-
kers.
Some of the board mem-
bers that will be representing
stock brokers include Mr Bart-
holomew Mswaka, Stock Bro-
kers Association chairman Mr
Benson Gasura, Mr Kholisani
Moyo, and Mr Markus de
Klerk. Mr Daniel Muchemwa
from the Ministry who will be
new accountant general.
In her remarks during the
same event incoming ZSE
chairman Mrs Caroline San-
dura said the new board will
implement projects which the
old group failed to achieve
during the tenure.
“As the new group we assure
minister that we will imple-
ment the projects that the
old group laid us a foundation
what we have left with its only
implementation
“There are business plans
which are there and it’s there
for us taking up where the old
board have left and move for-
ward with it,” she said.●
4 news
Chinamasa calls for innovation at ZSE
Minister Patrick Chinamasa

5. BH245

6. By Tawanda Musarurwa
HARARE - The Zimbabwe
Stock Exchange continues
to hemorrhage, with the
bourse's total market capi-
talisation dropping -8,87 per-
cent year-to-date to $2,93
billion.
At the close of trading on Fri-
day, the markets' total capi-
talisation had lost 0,57 per-
cent in just the single week
as investor sentiment contin-
ues to be poor - even among
the blue-chip counters.
With few new listings expected
in the outlook, analysts typi-
cally expect the heavyweight
counters to dictate pace of
trading activity, as they can
offer defensive qualities that
can limit the downward risk of
equity portfolios. But activity
last week did not reflect this.
Trading in the blue-chips
throughout last week was
weak with telecoms and bev-
erages giants Econet and
Delta, respectively recording
losses of 4,01 percent and
1,36 percent.
There was no price movement
in the other heavyweight,
cigarette manufacturer Brit-
ish American Tobacco. But
last week's largest gainers
included GetBucks, NMB and
Old Mutual with gains of 270
percent, 6,67 percent and
4,05 percent, respectively.
Turnover for last week totaled
$1,73 million.●
6 news
ZSE market capitalisation slides -8,87 YTD

7. BH247

8. HARARE –The Civil Serv-
ants and Business Union of
Zimbabwe (CSBUZ) on Fri-
day announced plans to rally
government workers to con-
tribute to a fund which will be
used to invest in various sec-
tors of the economy for their
benefit.
The recently established
union has three arms namely
the Credit Co-operative Soci-
ety, Association in Finance
(Assofin) and a company,
Sosolo General Dealers.
Addressing at a rally held
in the dormitory town of
Chitungwiza to unveil the
plans, CSBUZ founder and
president Mr Wonder Baudi
said the union was targeting
to establish branches in all
the country’s 10 provinces.
“This is only the first rally
here in Chitungwiza but
we aim to establish 2 000
branches across Zimbabwe.
In Hwange we established
eight branches in two weeks
and we would like at least five
branches in Chitungwiza,” he
said.
Mr Baudi said contributions
from members would be used
to invest in businesses in dif-
ferent sectors of the economy
while members would also
have access to loans through
the union credit bureau.
Under the union’s ambi-
tious program, Baudi said it
was eventually targeting to
establish a commercial bank.
“Enough is enough of ill-treat-
ment by the existing banks
owned by foreigners as they
charge abnormal interest
rates and require too much
for one to open an account,”
he said.
Union vice president Sam-
son Ziso urged civil servants
to work together to improve
their livelihoods.
“Let us put our heads together
to fight poverty and listen to
what each one of us wants to
do and build our wealth which
we will distribute among our-
selves,” he said.
“You might not have the
knowledge to run and grow a
business but we have experts
who will do that for you,” he
said, adding the government
was supportive of the union
initiative. - New Ziana●
8 news
Civil servants planning to establish investment fund

9. BH249

10. HARARE - - The main-
stream industrial index
extended Friday's gains,
gaining 0.66 (or 0,65 per-
cent) to start the new week
on 102.33 points.
But only two counters
traded in the positive.
Telecoms giant Econet went
up by $0,0290 to settle at
$0,2495 while Old Mutual
added $0,0196 to close at
$1,7883.
On the downside, cement
producer Lafarge eased
$0,0105 to trade at $0,2700
and Hippo slipped $0,0050
to close at $0,3525.
Other losses were in Nam-
pak which dropped by
$0,0030 to $0,0125, while
Starafrica shed $0,0019 to
settle at $0,0061 as retailer
OK Zim closed at $0,0382
after a $0,0018 slump.
The mining index was flat at
19.53 as Bindura, Falgold,
Hawange aand RioZim)
maintained previous price
levels at $0,0100, $0,0050,
$0,0300 and $0,1040
respectively.
- BH24 Reporter ●
ZSE10
Equities market extend gains
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11. BH2411

12. Movers CHANGE Today Price USc SHAKERS Change TODAY Price USc
Econet 13.15 24.95 Starafrica -23.75 0.61
Old Mutual 1.10 178.83 Nampak -19.35 1.25
OK Zim -4.50 3.82
Lafarge -3.74 27.00
Padenga -1.71 6.88
Hippo -1.39 35.25
Delta -0.32 52.00
Index Previous Today Move Change
Industrial 101.67 102.33 +0.66 points +0.65%
Mining 19.53 19.53 +0.00 points +0.00%
12 zse tables
ZSE
Indices
Stock Exchange
02 03
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13. 13 DIARY OF EVENTS
The black arrow indicate level of load shedding across the country.
POWER GENERATION STATS
Gen Station
05 February 2016
Energy
(Megawatts)
Hwange 356 MW
Kariba 285 MW
Harare 19 MW
Munyati 29 MW
Bulawayo 24 MW
Imports 0 - 300 MW
Total 1289 MW
—10 February 2016 - Nampak Zimbabwe Annual General Meeting: Venue 68 Birmingham Road,
Southerton, Harare: Time 12:00
—18 February 2016 - 70th Annual General Meeting of the members of CAFCA ; Place: Boardroom
at the company’s registered office at 54 Lytton Road, Workington, Harare; Time: 12:00 hours
—23 February 2015 - 38th Annual General Meeting of the members of Powerspeed Electrical
Limited; Place: Powerspeed Boardroom, 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 Hold-
ings 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...
THE BH24 DIARY

14. JOHANNESBURG -South Afri-
ca's rand strengthened on Mon-
day along with other emerg-
ing-market currencies after
softer-than-expected employ-
ment data from the United States
decreased bets of a rate hike by
the Federal Reserve.
Stocks were set to open flat at
0700 GMT, with the JSE securities
exchange's Top-40 futures index
up 0,2 percent.
At 0645 GMT the rand had firmed
0,29 percent to 15,9850 per dol-
lar, managing a third straight ses-
sion below the crucial 16,00 mark
as it consolidated recent gains.
The rand has gained more than 5
percent against the dollar in last
two weeks since slumping to an
all-time low of 17,9950 on Jan.
11.
Bonds were weaker in early trade,
with the benchmark paper due in
2026 adding 4.5 basis points to
9,215 percent.
Nonfarm payrolls in the United
States increased by just 151 000
jobs last month, data showed on
Friday, well short of expectations
for a rise of 190 000, prompting
some investors to push back bets
rate hikes by the Federal Reserve
to later in 2016.
The rand would, however, battle
for clear direction in the week,
traders said, with most Asian
financial markets closed for the
Lunar New Year holidays and a
dearth of data releases locally.
President Jacob Zuma's state of
the nation address on Thursday
would be closely watched for
clues on the government's plan
to rescue the ailing economy.
"The bigger question is whether
we get any hints of what the
budget will look like and so
whether a rating downgrade can
be avoided," said Rand Merchant
Bank currency strategist John
Cairns- Reuters●
regioNAL News14
Rand holds on to gains, stocks seen flat
JOHANNESBURG - South
Africa's Anglo American Plat-
inum Ltd (Amplats) reported
an 86 percent drop in full-
year profit on Monday, hit by
write-downs and restructur-
ing costs amid plunging com-
modity prices.
Amplats said diluted headline
earnings per share, the main
gauge of profit that strips off
certain one-off items, totalled
41 cents in the year to the
end of December compared
with 300 cents a year earlier.
Amplats, a division of Anglo
American Plc is undergoing
a cost-cutting programme
to deal with plunging prices
and low demand for precious
metal and the effects of a
crippling five-month strike in
2014. - Reuters●
SA's Anglo Plati-
num says FY profit
drops 86 pct

15. European shares declined for
a sixth day as investors fret-
ted over global growth pros-
pects.
The Stoxx Europe 600 Index
slid 0.6 percent to 324.06 at
9:05 a.m. in London, heading
for its longest losing streak
since June. It is trading at
about 14.2 times estimated
earnings, and about 18 per-
cent below its April 2015
peak. A gauge tracking equity
swings has jumped 42 percent
this year as the Stoxx 600
has lost about 11 percent.
“Investors can’t make up their
minds about the global econ-
omy, but the risk of recession
and deflation is rising,” said
Francois Savary, the chief
investment officer of Prime
Partners SA, a Geneva-based
investment manager. “It’s not
enough that valuations have
receded quite significantly
and earnings haven’t been
too bad -- sentiment is very
low and there isn’t much visi-
bility right now. That’s fright-
ening.”
European stocks fell 4.8 per-
cent last week in volatile
trading amid investor concern
over oil prices, earnings and
the strength of the US and
Chinese economies.
Among stocks moving on cor-
porate news today, Imagina-
tion Technologies Group Plc
slumped 4,7 percent after
forecasting a “material reduc-
tion” in sales and profitability
for the full year. The company
also said its chief executive
officer has stepped down.
Randgold Resources Ltd. rose
2,9 percent after saying it
more than doubled its spare
cash last year, allowing the
metals producer to increase
its dividend by 10 percent.
Casino Guichard-Perrachon
SA advanced 4,2 percent as
it agreed to sell its stake in
a Thai supermarket chain for
3,1 billion euros ($3,5 bil-
lion).
Rio Tinto Group and Glencore
Plc led a gauge of commod-
ity producers to the best per-
formance of the 19 industry
groups on the Stoxx 600. -
Bloomberg●
internatioNAL News15
European stocks decline for a sixth day on global growth concern

16. During the last four years, we
have seen one fundamental ana-
lyst after another claim that the
fundamentals are stronger than
ever as it relates to the metals.
We find this thinking to be ques-
tionable, at best.
Why have fundamentals failed so
miserably to control the market,
and are they relevant any longer?
In order to appropriately find
direction in this market, we may
have to actually understand that
we are asking the wrong question.
In fact, one has to ask if funda-
mentals were ever really con-
trolling to begin with.
Yes, I know everyone believes
that "eventually," fundamentals
will control this market. But if
one is truly honest in seeking an
answer to this question, one has
to ask themselves: If fundamen-
tals do not control the market
all the time, are they really ever
in "control" of the market at any
time? Or is it simply that when
the market is moving in the same
direction as dictated by the fun-
damentals, then the fundamen-
tals are simply a coincident factor,
rather than a controlling one? This
is what we refer to as the "broken
clock" syndrome.
Think about it. When a child is
sitting in the back seat of the car
with a toy steering wheel, and the
car turns in the direction the child
is turning his toy, does it mean the
child is controlling the car?
Again, based upon the market
action over the last four years,
one has to come to the conclusion
that fundamentals are really not
in control of this market. Rather,
the "adult" driving the car in the
metals market is sentiment, and
it controls the market all the time,
with its hands quite strongly on
the steering wheel.
Ultimately, it means that a pru-
dent investor must acquire the
appropriate tools through which
they are able to track market
sentiment in the metals if they
expect to be able to outperform
the market. As an example, our
methodology of tracking market
sentiment through the use of Elli-
ott Wave analysis directed us to
exit the market once we exceeded
the $1 900 level in gold, back in
2011, and has us moving back
into the market in 2016. While
we still expect lower lows in the
metals, the potential exists that
many of the miners have already
bottomed.
To retrace the thinking of the past
several years, for many analysts,
year after year they pointed to
the increased debt and rising
demand worldwide for the metals
(along with a litany of other rea-
sons), leading them to constantly
conclude that the gold is going
to rally to $2000-plus overnight.
After reading all these articles for
four years, one would think that
the market should have been well
over $2,000 by now.
More investors have appropri-
ately been questioning the effi-
cacy of the fundamentals upon
which these predictions have been
based, as they have seen their
comparative wealth destroyed
during the decline of the last four
years. This destruction is most
clearly evident in the silver mar-
ket, which has lost almost 75
percent of its value since its 2011
highs.
In 2015 and the start of 2016,
many have begun to recognize
the futility of using "fundamen-
tals" for predictive purposes in the
metals market: "Using fundamen-
tal analysis is futile, as a great
many precious-metals bulls will
attest." The author then makes
the head-scratching move of bas-
ing his predictions on the funda-
mentals he says have not worked.
However, over the last year, some
have begun to open their eyes to
the true futility of using funda-
mentals to predict the direction
of gold, and have done more than
provide lip service to the reality of
the market.
In order to be a well-informed and
successful investor in the metals
market, one must have a means
by which they can track what
always controls the metals-mar-
ket sentiment, rather than only
track what "sometimes" drives the
metals market. If you understand
the facetious nature of the last
sentence, then you are well on
your way to a successful invest-
ment career in the metals market.
- Market Watch●
16 analysis16 analysis
Why fundamentals are no longer relevant for gold