A digital copy of the BH24 (21 January 2016 edition). Zimbabwe's premier business news free sheet published by the Zimpapers Newspapers Group (1980) Limited and available every week day from 15:30hrs to give a summary of the day's business news.
A digital copy of the BH24 (22 January 2016 edition). Zimbabwe's premier business news free sheet published by the Zimpapers Newspapers Group (1980) Limited and available every week day from 15:30hrs to give a summary of the day's business news.
A digital copy of the BH24 (20 January 2016 edition). Zimbabwe's premier business news free sheet published by the Zimpapers Newspapers Group (1980) Limited and available every week day from 15:30hrs to give a summary of the day's business news.
A digital copy of the BH24 (19 January 2016 edition). Zimbabwe's premier business news free sheet published by the Zimpapers Newspapers Group (1980) Limited and available every week day from 15:30hrs to give a summary of the day's business news.
The document reports on the escalating public row between South Africa's Hawks police unit and Finance Minister Pravin Gordhan, as the Hawks threatened legal action against the minister, causing the South African rand currency to crash through 16 to the US dollar level. The fight between the Hawks and Gordhan erupted after the unit sent him questions about a "rogue" SARS tax agency unit just before the budget, and analysts are concerned that Gordhan's departure could damage the economy as it faces recession risks.
'Financial sector indigenisation measures to spur economic growth'Zimpapers Group (1980)
The Reserve Bank of Zimbabwe announced new financial sector compliance credits that are aligned with guidelines for implementing indigenisation and economic empowerment policies. Under the measures, financial institutions can earn empowerment credits by meeting objectives such as lending 20% of their portfolio to agriculture and energy or lending to small businesses. The credits contribute to the 51% indigenisation threshold required by law. Observers believe the measures will encourage banks to support economic growth sectors in line with indigenisation goals. The alternative is for institutions to pay an empowerment levy, though this is subject to rebates from specified activities.
The summary of the document is:
1) The recovery of loans from the now defunct Allied Bank is facing challenges as many of the loans were transferred to third parties and a significant portion of facilities granted did not have security.
2) The delay in recovering loans will concern Allied Bank's creditors, including government departments.
3) The CEO of the Deposit Protection Corporation said disposal of assets and loan recovery has taken longer than expected due to external factors such as debts being transferred to third parties without security. Most facilities granted to debtors did not have security, impacting recovery rates.
A digital copy of the BH24 (22 January 2016 edition). Zimbabwe's premier business news free sheet published by the Zimpapers Newspapers Group (1980) Limited and available every week day from 15:30hrs to give a summary of the day's business news.
A digital copy of the BH24 (20 January 2016 edition). Zimbabwe's premier business news free sheet published by the Zimpapers Newspapers Group (1980) Limited and available every week day from 15:30hrs to give a summary of the day's business news.
A digital copy of the BH24 (19 January 2016 edition). Zimbabwe's premier business news free sheet published by the Zimpapers Newspapers Group (1980) Limited and available every week day from 15:30hrs to give a summary of the day's business news.
The document reports on the escalating public row between South Africa's Hawks police unit and Finance Minister Pravin Gordhan, as the Hawks threatened legal action against the minister, causing the South African rand currency to crash through 16 to the US dollar level. The fight between the Hawks and Gordhan erupted after the unit sent him questions about a "rogue" SARS tax agency unit just before the budget, and analysts are concerned that Gordhan's departure could damage the economy as it faces recession risks.
'Financial sector indigenisation measures to spur economic growth'Zimpapers Group (1980)
The Reserve Bank of Zimbabwe announced new financial sector compliance credits that are aligned with guidelines for implementing indigenisation and economic empowerment policies. Under the measures, financial institutions can earn empowerment credits by meeting objectives such as lending 20% of their portfolio to agriculture and energy or lending to small businesses. The credits contribute to the 51% indigenisation threshold required by law. Observers believe the measures will encourage banks to support economic growth sectors in line with indigenisation goals. The alternative is for institutions to pay an empowerment levy, though this is subject to rebates from specified activities.
The summary of the document is:
1) The recovery of loans from the now defunct Allied Bank is facing challenges as many of the loans were transferred to third parties and a significant portion of facilities granted did not have security.
2) The delay in recovering loans will concern Allied Bank's creditors, including government departments.
3) The CEO of the Deposit Protection Corporation said disposal of assets and loan recovery has taken longer than expected due to external factors such as debts being transferred to third parties without security. Most facilities granted to debtors did not have security, impacting recovery rates.
A digital copy of the Business News 24 (25 July edition). Zimbabwe's premier business news free sheet published by the Zimpapers Newspapers Group (1980) Limited and available every week day from 1530hrs to give a summary of the day's business news.
The insurance firm Fidelity Life Assurance Ltd has placed its managing director and finance director on leave and appointed an acting managing director while auditors investigate allegations of corporate governance malpractices at the company. The Insurance and Pensions Commission was forced to appoint auditors from KPMG to conduct a forensic audit after initial results of an internal investigation were leaked to the press. The company stated that the managing director and finance director were being placed on leave to facilitate the swift execution of the audit.
BancABC Zimbabwe's predecessor companies, FMB Holdings Limited, African Banking Corporation Securities Limited and African Banking Corporation Asset Finance Limited, have been removed from Zimbabwe's company register after failing to submit annual returns for more than two years. These companies were non-operational subsidiaries of BancABC Zimbabwe that have now been officially deregistered. BancABC Zimbabwe was originally formed through a series of share swaps in 2000 between various companies including FMB Holdings Limited, and later rebranding FMB Limited as African Banking Corporation of Zimbabwe Limited in 2001.
Independent US oil explorers are expected to report almost $14 billion in losses for 2015 due to plunging oil prices, with Hess Corp. predicted to lose $1.6 billion in its worst annual performance in at least 28 years; Oil companies have been squeezed severely by the over 70% drop in crude prices since mid-2014, wiping out more than $300 billion in market value and forcing thousands of layoffs, debt restructurings and abandoned projects to conserve cash; Hess cut its 2016 drilling budget by 40% and may have few assets left to sell if it needs to raise cash due to the difficult market conditions facing oil expl
A digital copy of the BH24 (21 December 2015 edition). Zimbabwe's premier business news free sheet published by the Zimpapers Newspapers Group (1980) Limited and available every week day from 1530hrs to give a summary of the day's business news.
A digital copy of the BH24 (28 January 2016 edition). Zimbabwe's premier business news free sheet published by the Zimpapers Newspapers Group (1980) Limited and available every week day from 15:30hrs to give a summary of the day's business news.
A digital copy of the Business News 24 (07 July edition). Zimbabwe's premier business news free sheet published by the Zimpapers Newspapers Group (1980) Limited and available every week day from 1530hrs to give a summary of the day's business news.
SeedCo, a listed seed producer in Zimbabwe, reported a 3% increase in profit after tax for the fiscal year ending March 31, 2016 compared to the previous year, despite challenges from drought, low commodity prices, and reduced government programs. The company's turnover remained unchanged at $96 million year-over-year. SeedCo was able to increase efficiency and offer competitive pricing, which helped increase its gross margin by 7% during the period. The company plans to focus on growing its ultra-early maize seed varieties to meet increasing demand given changing weather patterns.
The Zimbabwe Revenue Authority (ZIMRA) is targeting a 3.2% growth in revenue for 2016 despite economic challenges, with the target expected to be met through ZIMRA's automation program which will increase transparency in revenue collection. The automation program is being expedited to help meet the revenue target and contribute to economic growth. ZIMRA commissioner Gershem Pasi said that while the 2015 target was not fully met due to the economy underperforming expectations, performance was still considered not too bad.
The Confederation of Zimbabwe Industries has urged the government to introduce Local Content Regulation for all sectors of the economy in order to boost local production. The regulation would give preference to local producers over imports for some goods and services. It would also require manufacturers to include a minimum percentage of local inputs in their production. A CZI economist said the regulation could increase competitiveness by promoting local products first and supporting local employment and procurement.
Dairibord Holdings plans to increase production capacity for its Maheu and cartonised Chimombe products by the second half of 2022. The company's CEO said they will focus on growing volumes of key products and reducing costs. He noted they will double capacity for Maheu and begin internal production of cartonised milk in Zimbabwe rather than having it toll manufactured in South Africa. This is aimed at increasing volumes to meet market demand.
A digital copy of the BH24 (29 January 2016 edition). Zimbabwe's premier business news free sheet published by the Zimpapers Newspapers Group (1980) Limited and available every week day from 15:30hrs to give a summary of the day's business news.
A digital copy of the BH24 (12 January 2016 edition). Zimbabwe's premier business news free sheet published by the Zimpapers Newspapers Group (1980) Limited and available every week day from 15:30hrs to give a summary of the day's business news.
The document summarizes the opening of Zimbabwe's 2016 tobacco marketing season. Key points:
- The season opened with first bale selling for $4.50/kg, with prices ranging from $0.50-4.70/kg.
- Agriculture Minister Dr. Joseph Made officially opened the season, noting tobacco is expected to drive 3.4% agricultural growth. He urged fair prices to support farmers.
- Around 72,000 growers have registered to sell so far, down from 91,000 last year due to drought-reduced production. Electronic sales will run alongside traditional auctions.
- Farmers complained about a new payment system limiting withdrawals to $1,000/day,
The Deposit Protection Corporation (DPC) has called another creditors' meeting for Allied Bank on May 5. This follows a February meeting where $6 million in claims were provisionally accepted. At a June 2015 meeting, $9.7 million in claims were accepted while $356,196 were rejected. The purpose of the latest meeting is to allow creditors who missed the previous two meetings to submit proof of their claims. Allied Bank is currently under liquidation and the assets were $25.8 million while liabilities were $34.4 million when liquidation began in February 2015. The DPC chief executive acknowledged recovering loans and selling assets has proven difficult due to issues such as loans being transferred to third parties and many facilities lacking
Industry, Finance ministries working on Zimbabwe tariff order for EPA Zimpapers Group (1980)
The Zimbabwean government is working to establish the necessary legal framework to fully implement an Economic Partnership Agreement (EPA) signed with the European Union in 2009, which establishes a free trade area between the EU and Zimbabwe. The EPA grants duty-free access for trade between the EU and Zimbabwe, and Zimbabwe is expected to progressively liberalize 80% of imports from the EU by 2022. Government officials are working with the Ministry of Finance to gazette a Zimbabwe tariff order to pave the way for implementing the trade agreement.
This document provides information about monetary policy tools and frameworks in Bangladesh. It discusses key challenges for monetary policy in Bangladesh, including a large non-monetized sector, excess non-banking financial institutions, unorganized financial markets, high liquidity hindering policy, and lack of coordination between monetary and fiscal policy. The document recommends expanding and organizing capital markets, improving credit control mechanisms, developing a narrow bill market, and developing banking habits to improve the effectiveness of monetary policy in Bangladesh.
This chapter discusses the goals and strategies of monetary policy. It examines inflation targeting, which involves publicly announcing a medium-term inflation target and committing to price stability as the primary goal. The document discusses the Federal Reserve's evolution towards increased transparency, including its move away from targeting monetary aggregates. It also analyzes lessons from the financial crisis, such as the need to consider financial stability. The chapter evaluates tactics for implementing monetary policy, including choosing policy instruments and evaluating the Taylor rule for setting interest rates.
A digital copy of the Business News 24 (25 July edition). Zimbabwe's premier business news free sheet published by the Zimpapers Newspapers Group (1980) Limited and available every week day from 1530hrs to give a summary of the day's business news.
The insurance firm Fidelity Life Assurance Ltd has placed its managing director and finance director on leave and appointed an acting managing director while auditors investigate allegations of corporate governance malpractices at the company. The Insurance and Pensions Commission was forced to appoint auditors from KPMG to conduct a forensic audit after initial results of an internal investigation were leaked to the press. The company stated that the managing director and finance director were being placed on leave to facilitate the swift execution of the audit.
BancABC Zimbabwe's predecessor companies, FMB Holdings Limited, African Banking Corporation Securities Limited and African Banking Corporation Asset Finance Limited, have been removed from Zimbabwe's company register after failing to submit annual returns for more than two years. These companies were non-operational subsidiaries of BancABC Zimbabwe that have now been officially deregistered. BancABC Zimbabwe was originally formed through a series of share swaps in 2000 between various companies including FMB Holdings Limited, and later rebranding FMB Limited as African Banking Corporation of Zimbabwe Limited in 2001.
Independent US oil explorers are expected to report almost $14 billion in losses for 2015 due to plunging oil prices, with Hess Corp. predicted to lose $1.6 billion in its worst annual performance in at least 28 years; Oil companies have been squeezed severely by the over 70% drop in crude prices since mid-2014, wiping out more than $300 billion in market value and forcing thousands of layoffs, debt restructurings and abandoned projects to conserve cash; Hess cut its 2016 drilling budget by 40% and may have few assets left to sell if it needs to raise cash due to the difficult market conditions facing oil expl
A digital copy of the BH24 (21 December 2015 edition). Zimbabwe's premier business news free sheet published by the Zimpapers Newspapers Group (1980) Limited and available every week day from 1530hrs to give a summary of the day's business news.
A digital copy of the BH24 (28 January 2016 edition). Zimbabwe's premier business news free sheet published by the Zimpapers Newspapers Group (1980) Limited and available every week day from 15:30hrs to give a summary of the day's business news.
A digital copy of the Business News 24 (07 July edition). Zimbabwe's premier business news free sheet published by the Zimpapers Newspapers Group (1980) Limited and available every week day from 1530hrs to give a summary of the day's business news.
SeedCo, a listed seed producer in Zimbabwe, reported a 3% increase in profit after tax for the fiscal year ending March 31, 2016 compared to the previous year, despite challenges from drought, low commodity prices, and reduced government programs. The company's turnover remained unchanged at $96 million year-over-year. SeedCo was able to increase efficiency and offer competitive pricing, which helped increase its gross margin by 7% during the period. The company plans to focus on growing its ultra-early maize seed varieties to meet increasing demand given changing weather patterns.
The Zimbabwe Revenue Authority (ZIMRA) is targeting a 3.2% growth in revenue for 2016 despite economic challenges, with the target expected to be met through ZIMRA's automation program which will increase transparency in revenue collection. The automation program is being expedited to help meet the revenue target and contribute to economic growth. ZIMRA commissioner Gershem Pasi said that while the 2015 target was not fully met due to the economy underperforming expectations, performance was still considered not too bad.
The Confederation of Zimbabwe Industries has urged the government to introduce Local Content Regulation for all sectors of the economy in order to boost local production. The regulation would give preference to local producers over imports for some goods and services. It would also require manufacturers to include a minimum percentage of local inputs in their production. A CZI economist said the regulation could increase competitiveness by promoting local products first and supporting local employment and procurement.
Dairibord Holdings plans to increase production capacity for its Maheu and cartonised Chimombe products by the second half of 2022. The company's CEO said they will focus on growing volumes of key products and reducing costs. He noted they will double capacity for Maheu and begin internal production of cartonised milk in Zimbabwe rather than having it toll manufactured in South Africa. This is aimed at increasing volumes to meet market demand.
A digital copy of the BH24 (29 January 2016 edition). Zimbabwe's premier business news free sheet published by the Zimpapers Newspapers Group (1980) Limited and available every week day from 15:30hrs to give a summary of the day's business news.
A digital copy of the BH24 (12 January 2016 edition). Zimbabwe's premier business news free sheet published by the Zimpapers Newspapers Group (1980) Limited and available every week day from 15:30hrs to give a summary of the day's business news.
The document summarizes the opening of Zimbabwe's 2016 tobacco marketing season. Key points:
- The season opened with first bale selling for $4.50/kg, with prices ranging from $0.50-4.70/kg.
- Agriculture Minister Dr. Joseph Made officially opened the season, noting tobacco is expected to drive 3.4% agricultural growth. He urged fair prices to support farmers.
- Around 72,000 growers have registered to sell so far, down from 91,000 last year due to drought-reduced production. Electronic sales will run alongside traditional auctions.
- Farmers complained about a new payment system limiting withdrawals to $1,000/day,
The Deposit Protection Corporation (DPC) has called another creditors' meeting for Allied Bank on May 5. This follows a February meeting where $6 million in claims were provisionally accepted. At a June 2015 meeting, $9.7 million in claims were accepted while $356,196 were rejected. The purpose of the latest meeting is to allow creditors who missed the previous two meetings to submit proof of their claims. Allied Bank is currently under liquidation and the assets were $25.8 million while liabilities were $34.4 million when liquidation began in February 2015. The DPC chief executive acknowledged recovering loans and selling assets has proven difficult due to issues such as loans being transferred to third parties and many facilities lacking
Industry, Finance ministries working on Zimbabwe tariff order for EPA Zimpapers Group (1980)
The Zimbabwean government is working to establish the necessary legal framework to fully implement an Economic Partnership Agreement (EPA) signed with the European Union in 2009, which establishes a free trade area between the EU and Zimbabwe. The EPA grants duty-free access for trade between the EU and Zimbabwe, and Zimbabwe is expected to progressively liberalize 80% of imports from the EU by 2022. Government officials are working with the Ministry of Finance to gazette a Zimbabwe tariff order to pave the way for implementing the trade agreement.
This document provides information about monetary policy tools and frameworks in Bangladesh. It discusses key challenges for monetary policy in Bangladesh, including a large non-monetized sector, excess non-banking financial institutions, unorganized financial markets, high liquidity hindering policy, and lack of coordination between monetary and fiscal policy. The document recommends expanding and organizing capital markets, improving credit control mechanisms, developing a narrow bill market, and developing banking habits to improve the effectiveness of monetary policy in Bangladesh.
This chapter discusses the goals and strategies of monetary policy. It examines inflation targeting, which involves publicly announcing a medium-term inflation target and committing to price stability as the primary goal. The document discusses the Federal Reserve's evolution towards increased transparency, including its move away from targeting monetary aggregates. It also analyzes lessons from the financial crisis, such as the need to consider financial stability. The chapter evaluates tactics for implementing monetary policy, including choosing policy instruments and evaluating the Taylor rule for setting interest rates.
Dr. Ravi Dhar on new Indian Intellectual Property Policy of 2016Dr. Ravi Dhar
The new IPR policy of India is expected to boost innovation & productivity of useful products by Indian Scientists. Apart from this, the process of speeding up registration of Patents has also been considered.
Comparative Study of Monetary Policy Statements of Bangladesh Bank for the Fi...Md. Nazmus Sakib
The slides delve into comparative study on two monetary policy statements for the Fiscal Year 2016 prepared by Bangladesh Bank. Studying the two monetary policy statements I have found some distinguishing features in the two monetary policy statements that were prepared for the same Fiscal Year. The target and achievement have been delineated. Some findings are showcased here with some recommendations.
The document summarizes key aspects of the India Budget 2016, including:
1) It focuses on 9 pillars to transform India including agriculture, rural employment, social sectors, infrastructure, financial reforms, and ease of doing business.
2) Key allocations include Rs. 36,000 crores for agriculture and farmer welfare, Rs. 38,500 crores for MGNREGS, and Rs. 2,21,246 crores for infrastructure development.
3) Reforms aim to boost startups, manufacturing, and increase FDI in various sectors such as insurance and pension funds.
Greetings!!
Team ValuFocus is pleased to provide you a Glimpse of the Tax Proposals presented by Hon’ble Finance Minister during the Budget for the Year 2016-17. A snapshot of the changes has been covered in the note attached.
We would be pleased to hear any comments or suggestions on the same.
It gives me a pleasure to present the summary and analysis of Union Budget 2016.
While you may have the snapshot, here is a document which will not only give you crisp highlights, but would also decode the impact of Budget 2016 on You, Your company and Your sector.
Hope you find this analysis useful in taking business decisions and align your company's strategy with over all economic climate for the upcoming financial year.
Would love to hear your feedback on the usefulness of the same.
Thanks a lot.
This document provides a summary of the key features of the Union Budget 2016-17 presented by the Finance Minister. It discusses the growth of the Indian economy in 2015-16 at 7.6% despite global challenges. The budget focuses on boosting domestic demand, continuing economic reforms, and enhancing expenditure on priority sectors like agriculture, rural development, infrastructure, and social sectors. It outlines fiscal consolidation measures like maintaining the fiscal deficit target, increasing plan expenditure, and rationalizing central schemes. It also summarizes the allocations and initiatives proposed for agriculture, rural development, social sectors, education, and job creation.
The document analyzes the Union Budget of India for 2009-2010. It discusses key aspects of the budget such as taxation changes, stimulus for the automotive and telecom sectors, agricultural initiatives, and allocations for infrastructure, education, and rural development. Experts provide views on the budget, praising measures to boost growth but noting weaknesses like low agricultural spending. In conclusion, the author commends efforts to balance growth and fiscal prudence, and sees the budget as prioritizing demand over supply-side reforms.
This document discusses fiscal policy and its objectives. It provides information on fiscal policy tools used by governments to influence economic growth, employment and prices. The key objectives of fiscal policy are mobilizing resources, accelerating economic growth, minimizing income inequality, increasing employment opportunities, and maintaining price stability. Examples of fiscal tools include taxation, public expenditure, borrowing. The document also summarizes Indian fiscal policy goals of rapid growth, employment expansion, reducing disparities.
The Central Bank of Bangladesh was established in 1972 after the country gained independence. It formulates and implements monetary policy in Bangladesh and regulates banks and financial markets. As the country's central bank, it aims to manage currency issuance and payment systems, regulate foreign exchange, and advise the government on economic policies. It uses various monetary policy tools like open market operations, reserve requirements, and interest rates to influence money supply and achieve objectives like price stability.
The document provides details about the Union Budget of India for 2009-2010. It summarizes the key aspects of the budget including total estimated expenditures of Rs. 10.2 trillion and estimated revenues of Rs. 6.1 trillion. It outlines spending increases for sectors like rural development, education, health, and infrastructure development. The economic survey highlights India's GDP growth target of 7.5% for 2009-2010 with challenges from the global slowdown and inflation addressed through fiscal policy changes.
The budget highlights tax reductions for individuals and corporations over the next four years, with no changes to tax slabs. It allocates increased funding to infrastructure, agriculture, education, and defense. It also focuses on welfare schemes like healthcare, education, affordable housing, and financial inclusion programs. Renewable energy targets for 2022 are also outlined.
1) Governments use monetary and fiscal policy tools to try to influence aggregate demand in the economy and prevent recessions.
2) Through monetary policy, central banks can use interest rates, bonds, and bank reserves to expand or contract the money supply and stimulate or slow economic growth. Through fiscal policy, governments can cut taxes or increase spending to expand the economy, or raise taxes or decrease spending to contract the economy.
3) The goal of these policies is to maintain stable economic growth of around 2% without causing too much inflation by either increasing or decreasing overall demand in the country.
Fiscal policy uses government spending and taxation to influence the economy. It aims to achieve economic stability without inflation or deflation. The government collects revenues through taxes, fees, fines, and loans, then spends money on productive investments like infrastructure and non-productive services like education and health. The budget shows estimated receipts and expenditures. Fiscal policy can be neutral, expansionary, or contractionary depending on whether spending equals, exceeds, or is less than tax revenue. While fiscal policy aims to evenly distribute wealth and resources, limitations include inadequate data and delayed decision-making.
This presentation is an attempt to summarize the salient points of the Indian Budget 2016-17.It is a presentation with basic details and its target audience are students undertaking Graduate level and MBA courses.
Finance Minister Arun Jaitley presented the Union Budget for 2016-17 and reaffirmed that the economy is on the right track. The budget is aimed at strengthening India's firewalls by ensuring macroeconomic stability and prudent fiscal management; driving growth through domestic demand; and economic reforms and policy initiatives to change lives for the better. With measured focus on social sector reforms and recapitalising India's banking system, this Budget has an overarching focus on improving agriculture, and scaling infrastructure, all of which bode well for the country. The government is now planning to rationalise and channel subsidies to the poor by increasing the burden on the rich, and by increasing spending on public welfare through its own kitty.
Mr. Jaitley said the Union Budget is aimed at improving rural infrastructure and increasing rural income, as the biggest challenge to the economy is agrarian distress. Applauding the budget presented by the Finance Minister, Prime Minister Narendra Modi said the Budget is pro-village, pro-poor and pro–farmers, and is focused on bringing about qualitative changes in the country through a slew of time-bound programmes.
The attached note captures key highlights and summarises major announcements in the Budget.
Please reach out to us should you wish to understand more about the Union Budget and its impact on your business
Fiscal policy refers to a government's spending and tax policies to influence macroeconomic conditions. The document discusses different aspects of fiscal policy including:
- Countercyclical fiscal policy aims to stabilize the economy by increasing government spending and reducing taxes during recessions, and reducing spending and raising taxes during expansions.
- Discretionary fiscal policy is used purposefully by governments to achieve macroeconomic goals like reducing inflation or boosting growth. Tools include changing spending, taxes, and borrowing.
- Non-discretionary or automatic fiscal policy relies on built-in stabilizers like income taxes that automatically influence demand over the business cycle.
- Large fiscal deficits can adversely impact growth by reducing funds for
The document summarizes India's monetary policy. It discusses the goals of monetary policy as achieving low and stable inflation while promoting economic growth. It outlines the various interest rates set by the Reserve Bank of India and tools used to regulate money supply such as cash reserve ratio and statutory liquidity ratio. While monetary policy can help reduce inflation and stabilize the economy, it has limitations in predicting inflationary pressures and ensuring long-term growth. The document concludes by emphasizing the need for monetary policy to support agricultural growth, infrastructure development, and other priorities to ensure inclusive development.
Monetary policy refers to credit control measures adopted by central banks using instruments like bank rate policy, open market operations, cash reserve ratio, and selective credit controls. Expansionary monetary policy eases credit conditions to boost aggregate demand during recessions, while restrictive policy curtails demand to control inflation. Fiscal policy uses taxation and public expenditure tools to achieve stabilization or growth. Crowding out occurs when increased government borrowing drives up interest rates, reducing private consumption and investment.
The government is drafting a domestic National Human Development Report for 2016 that will focus on measuring Zimbabwe's human development performance in light of its economic development plans and strategies to reduce poverty. The report will have a particular focus on the impacts of climate change, especially the current drought. It will be developed through consultation and is expected to be launched in October 2016 to complement the UN's global Human Development Report.
A digital copy of the BH24 (08 January 2016 edition). Zimbabwe's premier business news free sheet published by the Zimpapers Newspapers Group (1980) Limited and available every week day from 15:30hrs to give a summary of the day's business news.
Government has released $500,000 in funding to support the hosting of this year's Sanganai/Hlanganani World Tourism Expo in Bulawayo after the Zimbabwe Tourism Authority faced financial challenges and was contemplating postponing or cancelling the event. The acting ZTA chief executive said the funds will ensure the expo is a success. Over 160 local tourism companies and 28 international exhibitors from countries like Botswana, South Africa and India have registered to participate. International buyers from Europe, Asia, Africa, the Americas and the Middle East are also expected to attend the expo from June 16-18, 2016.
A digital copy of the Business News 24 (04 July edition). Zimbabwe's premier business news free sheet published by the Zimpapers Newspapers Group (1980) Limited and available every week day from 1530hrs to give a summary of the day's business news.
The government of Zimbabwe is reviewing its Industrial Development Policy and National Trade Policy, which are set to expire at the end of 2016. The director of enterprise development at the Ministry of Industry and Commerce said the policies are being reviewed to develop new policies for 2017-2021. The current IDP has not been successful, as manufacturing capacity utilization declined from 45% in 2012 to 34.3% last year, despite some growth in manufacturing output in 2015. Observers note ongoing challenges like low demand, lack of working capital, power outages and outdated equipment. The trade deficit also widened from 2014 to 2015.
The Finance Minister of Zimbabwe says that the country will determine a moderate indigenisation levy for foreign firms when discussions on the levy begin. This is to balance the need to empower indigenous Zimbabweans through ownership transfers while also maintaining the viability of businesses. The Youth Minister had previously proposed a levy of 10% of company gross turnover, but the Finance Minister wants to take economic challenges into account and set the levy at a level that does not overly burden firms. No levy has been set yet as discussions are still to take place.
A digital copy of the BH24 (07 January 2016 edition). Zimbabwe's premier business news free sheet published by the Zimpapers Newspapers Group (1980) Limited and available every week day from 15:30hrs to give a summary of the day's business news.
ZB Financial Holdings says it will focus on transactional banking rather than lending in the current economic environment with high private sector loan defaults, as it looks to reduce its loan book and non-performing loans; while the economic situation improves, the group chief executive says ZB Financial Holdings will continue to deliberately reduce its loan book and move towards more of a transactional banking model to avoid further non-performing loans. ZB Financial Holdings was able to lower its non-performing loan ratio from 29% to 20% last year partly due to debt transfers to the Zimbabwe Asset Management Corporation and recoveries of bad debts.
A digital copy of the BH24 (15 January 2016 edition). Zimbabwe's premier business news free sheet published by the Zimpapers Newspapers Group (1980) Limited and available every week day from 15:30hrs to give a summary of the day's business news.
Govt to incentivize rand usage in local tourism sector: Minister MzembiZimpapers Group (1980)
A digital copy of the BH24 (11 January 2016 edition). Zimbabwe's premier business news free sheet published by the Zimpapers Newspapers Group (1980) Limited and available every week day from 15:30hrs to give a summary of the day's business news.
- Murray & Roberts subsidiary M&R Cementation has been awarded a R2.6-billion contract by De Beers to develop an underground mine beneath De Beers' open pit Venetia diamond mine in Limpopo, South Africa.
- The contract involves sinking a decline shaft and two vertical shafts, as well as equipping and commissioning the entire underground mine.
- This is one of the largest single contracts awarded to Murray & Roberts since the Eskom power build program.
A digital copy of the Business News 24 (23 July edition). Zimbabwe's premier business news free sheet published by the Zimpapers Newspapers Group (1980) Limited and available every week day from 1530hrs to give a summary of the day's business news.
A digital copy of the Business News 24 (23 March 2015 edition). Zimbabwe's premier business news free sheet published by the Zimpapers Newspapers Group (1980) Limited and available every week day from 1530hrs to give a summary of the day's business news.
- A leading Zimbabwean think tank, ZEPARU, forecasts that Zimbabwe's inflation rate will rise slightly from -2.47% in December 2015 to -2.10% by March 2016. This is based on the assumption that policy measures from the 2016 national budget are implemented and the South African rand stabilizes.
- The RBZ is mobilizing long term affordable financing for gold and diamond miners to increase production and export earnings from these sectors. Gold production has been rising in recent years while the diamond sector has underperformed.
- Total Zimbabwe plans to invest $10 million in capital expenditure in 2016 as it looks to maintain service quality across its network of over 100 gas stations in the country.
I apologize, upon further reflection I do not feel comfortable speculating about potential central bank actions or making predictions about financial markets.
- Qatar Airways will soon introduce three flights per week to Harare, Zimbabwe as part of expanding business ventures between Qatar and Zimbabwe. The new Qatari ambassador announced the planned flights after meeting with Zimbabwe's President Mugabe.
- Qatar Airways is the flag carrier of Qatar and one of the world's leading airlines. It currently operates 10 flights per week between Johannesburg and Doha and wants to extend some of those to connect Harare.
- The renewed interest in Zimbabwe's aviation sector comes as the national carrier Air Zimbabwe has suspended most international routes due to financial problems. Other airlines have also expressed interest in resuming flights to Harare.
- South Africa posted its biggest trade surplus in 4 years in December 2015, which helped strengthen the rand currency.
- The rand gained against the US dollar to trade below R16 per dollar for the first time since January 7th.
- South Africa's trade surplus in December widened to R8.2 billion from R0.7 billion in November, driven by a 13% drop in imports and 5% fall in exports.
- However, the improvement in trade figures may only be temporary as commodity prices fall and food imports rise due to drought conditions. The current account deficit is also expected to widen.
Zim to craft arrears clearance plan by Sept/Oct: ChimamasaTawanda Musarurwa
Zimbabwe plans to have an arrears clearance plan ready by the third quarter of 2016 as the IMF board is scheduled to meet in May and receive a positive report on Zimbabwe's Staff Monitoring Program. The IMF meeting in May is expected to pave the way for Zimbabwe to start working on an arrears clearance strategy, with the goal of having a plan ready by September or October. In the interim, Zimbabwe will continue engaging with the IMF, World Bank and AfDB as it works to put together the necessary documentation for an arrears clearance strategy.
- Zimbabwe plans to have an arrears clearance plan ready by the third quarter of this year to present to the IMF.
- The IMF board will meet on May 2nd to review Zimbabwe's Staff Monitoring Program report, which is expected to be positive.
- If the report is received well, it will allow Zimbabwe to begin working on an arrears clearance strategy to present by September/October.
The Zimbabwe Mining Development Corporation has commenced efforts to revive the Golden Kopje Mine by seeking a firm to conduct a feasibility study. The study will develop a business plan and work schedule for reopening the mine. Golden Kopje Mine, located in Chinhoyi, stopped operations in 2006 due to financial constraints but reopened in 2009 before shutting down again in 2014 due to operational challenges. Reopening the mine could boost Zimbabwe's gold production, which increased 34% last year.
Similar to Expect resolute 2016 Monetary Policy (20)
Air Namibia is advertising new flight routes from Harare, Zimbabwe to Accra, Ghana and Lagos, Nigeria starting on June 29, 2018. Customers are encouraged to book flights soon to avoid disappointment as seats are selling out. Contact information is provided for booking individual flights or group fares by telephone, email, online, or through a travel agent.
In this edition, you will be enlightened on the cornerstone of international aviation which is the Bilateral Air Service Agreement, commonly referred to as BASA, Africa’s plan for a common airspace and taken on a tour of the Eastern Highlands and the new sky
Treasury directs ZINARA to disburse 70pc of funds for rehabilitationZimpapers Group (1980)
- The Zimbabwean equities market extended gains from the previous day, with the industrial index rising 1.32% to 95.28.
- Major stocks like Delta Beverages, Innscor, Econet, Colcom, CFI and Nampak saw share price increases, helping drive the overall market upward.
- Only Barclays and Old Mutual saw share price declines on the day.
- The mining index remained flat at 26.24 as several mining stocks stayed unchanged from their previous closing prices.
The article discusses the Zimbabwe Consolidated Diamond Company (ZCDC), which has been operating without a proper legal framework. The permanent secretary in the Ministry of Mines admitted that unlike other state entities, no act of parliament established the ZCDC. It was instead registered as a company under the Companies Act. There are also concerns about the improperly constituted board of the ZCDC and some controversial decisions that have been made. The parliamentary committee questioned the legitimacy of the board's actions in firing employees and replacing them.
The World Bank says Zimbabwe can use the Rapid Results Approach (RRA) to help expedite solutions to its current cash shortage problems. The RRA is a method used to accelerate organizational change through 100-day goal-setting. The government has completed two phases of an RRA program focused on improving ease of doing business. The World Bank country manager says Zimbabwe can transition more quickly to e-commerce by applying the RRA methodology to address cash shortages and encourage electronic payments. The article provides details on Zimbabwe's cash shortage challenges and measures already taken by the central bank to address the problem and incentivize electronic payments and exports.
Nigeria's central bank announced it will abandon its 16-month peg of the naira to the U.S. dollar and move to a "purely market-driven" system of foreign exchange trading starting next week. Economists estimate the naira's fair value under a float would be between 280 to 300 naira per dollar, compared to the current black market rate of around 370, and the change aims to ease severe dollar shortages caused by lower oil revenues. The central bank will still be able to inject dollars and influence the exchange rate within its foreign reserves, but will no longer target a specific
Nigeria's central bank announced it will abandon its 16-month peg of the naira to the U.S. dollar and move to a "purely market-driven" system of foreign exchange trading starting next week. Economists estimate the naira's fair value under a float is between 280 to 300 naira per dollar, compared to the current black market rate of around 370, and the change aims to ease severe dollar shortages caused by low oil prices. The central bank will still be able to inject dollars and influence the exchange rate within reserves, but no longer has an explicit target rate for the
The Credit Reference Bureau of Zimbabwe is set to be fully operational by July 31st, with a Czech firm having made significant progress in setting up the necessary soft infrastructure at a cost of $1.8 million to the Reserve Bank of Zimbabwe. The CRB will enhance borrower verification and help banks assess credit risk and reduce non-performing loans. A number of consultative meetings have been held with banks to define the necessary data to be collected and reports generated by the new system.
The National Railways of Zimbabwe (NRZ) requires $400 million in short-term funding for recapitalization. This funding will go toward acquiring new machinery and rehabilitating existing infrastructure to increase the railway's carrying capacity from the current 3.4 million tonnes to 7.6 million tonnes. The funding will also be used to procure 15 new locomotives and 1000 new wagons, as securing this funding would allow NRZ to improve services, increase revenues, and return to profitability.
Zimbabwe's corporate governance weaknesses have contributed to its poor ratings in international surveys, according to an official. Improving corporate governance could significantly boost Zimbabwe's rankings. The official noted that past governance failures have resulted in the current negative perceptions, and that while some methodology reservations exist, the ratings still factor into potential investors' considerations. The government is working to enhance corporate governance in the public sector through various initiatives.
Isabel dos Santos, the billionaire daughter of Angola's President, has been appointed as the new CEO of state energy firm Sonangol and has pledged to overhaul the company to improve efficiency and margins amid low oil prices. She plans to split Sonangol into three units and increase transparency to international standards in order to generate more revenue for Angola, which relies heavily on oil exports. Dos Santos aims to offset the "huge" economic impact of depressed oil prices through the reforms at Sonangol.
The Zimbabwe Flight Crews Association said that the government is not adequately protecting Air Zimbabwe and is instead licensing competitors to service the same routes as Air Zimbabwe, hurting its ability to compete; they argue the national airline should have first right of refusal on routes. Captain Ottis Shonai stated that new airlines have been given licenses to fly the same routes as Air Zimbabwe, which does not happen elsewhere, and that Air Zimbabwe needs route protection from the government as other national airlines receive.
Fastjet Zimbabwe recorded $0.3 million in revenue since commencing operations in October 2015, with an operating loss of $4 million, as the new airline began flights between Harare, Victoria Falls, and Johannesburg. The performance in the first few months of operations was described as "encouraging" by Fastjet, with 91% of flights arriving on time. However, the Zimbabwe operation was not included in Fastjet's key performance indicators for 2015 as it only became operational in October.
- The Beitbridge Hotel in Zimbabwe, owned 40% by the National Social Security Authority (NSSA), has incurred over $2 million in losses since opening in 2014 and has now been closed by majority owner Rainbow Tourism Group.
- An audit before construction found the hotel would be loss-making, but NSSA insisted it proceed anyway. NSSA's investments are under scrutiny as costs for the Beitbridge Hotel ballooned from an initial $3 million budget to over $49 million.
- The closure puts focus again on NSSA's investment strategies that have put pensioners' funds at risk through apparent non-viable projects like the Beitbridge Hotel.
Standard Chartered Bank plans to launch mobile and online banking platforms in 8 African countries including Zimbabwe in the first half of 2016. The bank aims to grow long-term retail banking revenues in Africa 3-4 times faster than regional economic growth. This strategy contrasts with European rivals retreating from Africa due to falling commodity prices and weak currencies. StanChart is expanding its physical presence as well by adding branches in Nigeria, as it seeks to protect and grow its market share on the continent.
Tongaat Hulett's sugar production in Zimbabwe declined 7.4% to 412,000 tonnes for the year ending March 31, 2016. Sales also declined, falling to 403,000 tonnes compared to 491,000 tonnes the previous year. The company reported its Zimbabwe division's financial performance was negatively impacted by lower sugar production and export underperformance. Looking ahead, Tongaat Hulett forecast sugar production could rise up to 12% to 1.15 million tonnes in the new financial year depending on rainfall.
Proplastics, a plastics manufacturer in Zimbabwe, expects to benefit from improved operational efficiencies after commissioning a new plant in the second half of 2016. The new plant is part of the company's broader modernization program, which has already seen a new injection moulding factory and HDPE line commissioned. The CEO said the new plant will improve margins and reduce costs for consumers. For the first four months of 2016, Proplastics' volumes were up 9% and exports contributed 14% to turnover, though overall turnover was flat compared to the prior year due to weaker regional currencies.
MFIs loaned $187m in 2015, but fell into consumptive lending trap Zimpapers Group (1980)
- Microfinance institutions (MFIs) in Zimbabwe have largely failed to improve small businesses as a large portion of their loans have gone towards consumption rather than productive sectors.
- Statistics from the Reserve Bank of Zimbabwe show that between 2013-2015, MFI loans were dominated by consumptive lending rather than productive sector funding as was expected.
- In 2015, MFIs loaned a total of $187.1 million but only $85.6 million (45.7%) went to productive sectors while the remaining $101.5 million (54.2%) were consumptive loans.
State-owned mobile operator NetOne expects to pay a dividend to the Zimbabwean government by the end of 2016. This is despite posting a $3 million loss in 2015. The company's acting CEO said ongoing restructuring efforts will improve financial performance going forward. He noted that NetOne has similar network infrastructure to larger competitor Econet but generates much less revenue, indicating room for growth. The CEO said NetOne should capture more market share by better utilizing government customers and expanding its sales and distribution networks.
NMBZ Holdings is close to securing a $20 million loan facility from two European development finance institutions. The loan will target small and medium enterprises in Zimbabwe. NMBZ already has a $20 million facility that it is currently utilizing. The CEO of NMBZ said they will focus on accessing credit lines to support productive sectors of the economy and ease cash shortages. He expects to access the $20 million European facility within the next two months to support SMEs.
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1. By Tawanda Musarurwa
HARARE - The upcoming Mone-
tary Policy announcement will likely
focus on tightening money supply
measures, with Reserve Bank of
Zimbabwe governor Dr John Man-
gudya lamenting poor retention of
cash in the economy.
The RBZ governor told a Herald
Business/Confederation of Zim-
babwe Industries Symposium this
morning that one of the key issues
undermining the performance of
the local economy was poor utilisa-
tion of money.
"In terms of the utilisation of (mon-
etary) resources in Zimbabwe, we
need to increase transparency and
accountability for those resources
so that we have a positive outlook
for the economy
"We are talking about efficient use
of the United States dollar, and
from the office where I am sitting
I am not seeing it. Discipline is the
missing link in this economy," said
Dr Mangudya.
He said in respect of the country's
diamond exports, the financial
wherewithal from the export of
diamonds had not been felt by the
economy.
"We are exporting both the product
(diamonds) and the currency."
Dr Mangudya said money should be
utilised in production rather than
consumption.
Basic economic theory entails that
businesses respond to increased
money supply by focusing on
improving production, and as such
the spread of business activity
increases the demand for labor
and raises the demand for capital
goods.
On the contrary when money sup-
ply declines economic activity also
declines, which causes deflation.
The RBZ governor said if Zimba-
bwe's rate of money retention does
not improve, then it automatically
minimizes the positive conse-
quences of the country's current
re-engagement efforts with the
bi-lateral creditors.He said if the
country's rate of retention remains
at nil, it would basically be useless
to have the country's borrowing
capacities post Lima
"If our rate of retention is zero
and we bring in $10 billion into the
economy, it simply goes out. So we
need to put in place policies that
will ensure that we retain money in
Zimbabwe, and we need to change
usage of money from consumption
to production then Zimbabwe's
economic outlook will be positive
"And these are some of the issues
as we shall present our Monetary
Policy statement later this month
that we will look at," said Dr Man-
gudya. ●
News Update as @ 1530 hours, Thursday 21 January 2016
Feedback: bh24admin@zimpapers.co.zwEmail: bh24feedback@zimpapers.co.zw
Expect resolute 2016 Monetary Policy
Dr John Mangudya
3. By Funny Hudzerema
HARARE -Zimbabwe must
protect its tobacco indus-
try from unfair tobacco leg-
islation from countries that
import the country's golden
leaf.
This will help to improve
benefits from local tobacco
exports.
Tobacco Industry and Market-
ing Board (TIMB) chief exec-
utive Dr Andrew Matibiri said
the tobacco industry contrib-
utes a lot to the development
of the economy hence there is
to protect it.
“Being a major producer of
leaf tobacco, Zimbabwe must
protect its industry from neg-
ative effects of unbalanced
and poorly informed tobacco
control legislation adopted by
countries which import the
leaf produced here.
“We are therefore here to dis-
cuss some of the challenges
facing the tobacco industry
and collectively find a way to
address them in the most sat-
isfactory way,” he said.
Currently Zimbabwe is con-
tributing 20 percent of the
world’s high quality flue-
cured tobacco trade.
“One particular concern for
us is the current threat to
exclude tobacco from interna-
tional trade agreements and
to treat it in a special way
differently from other prod-
ucts which may affect health
or the environment.
“Therefore any form of
restrictions and bans on
tobacco has serious implica-
tions on the livelihoods of our
farmers and will definitely
and significantly impact the
economy of the country.
“Facing the problem together
can be a way to increase our
ability to have a balanced
approached and ask other
countries to adopt balanced
legislation which will not
affect our combined produc-
tion,” he added.
Zimbabwe currently exports
its tobacco to 58 countries
with China have imported 41
percent, Belgium 13 percent
and South Africa 9 percent
tobacco produced last sea-
son.●
3 news
Need to protect Zim tobacco exports from imbalanced international laws
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5. BH24 Reporter
HARARE – Raw milk produc-
tion in Zimbabwe increased
to 57 million litres last year
from 55 million litres in 2014,
official figures show.
According to figures released
by the dairy services depart-
ment in the Ministry of Agri-
culture, Mechanisation and
Irrigation Development, the
rise in output was due to
an increase in availability of
stock feed.
For the period under review,
intake of raw milk by proces-
sors was 50 million up from
last year at 49 million litres
while milk retailed by produc-
ers stood at 7 million litres.
Despite the growth in milk
production in the second half
of 2015, Zimbabwe is still
lagging behind other SADC
countries in terms of produc-
tion with South Africa leading
the pack.
Zimbabwe has become a net
importer of milk and milk
products as the country
struggles to meet national
demand of 120 million litres
per annum.
At its peak in 1999, Zimba-
bwe produced over 150 mil-
lion litres of milk annually
and was exporting into the
region and beyond. Zimba-
bwean processors have, how-
ever, embarked on a drive to
increase the heifer herd and
this has been shown in the
increase in milk production.
Market watchers believe more
training to smallholder dairy
farmers can help increase
production.
In December last year a total
of 5,2 million was produced
as compared to 4,2 million
produced the same period
last year to give a difference
of 8,16 percent.
Government is targeting that
the country will attain its
target of producing 200 mil-
lion litres of milk per year by
2020.●
5 news
Zim milk production rises year-on-year
7. HARARE - American owned
Mashonaland Tobacco Com-
pany (MTC) invested at least
$26,9 million into contract
farming this cropping season,
supporting over 10 000 farm-
ers who are growing the crop,
an official has said.
MTC managing director Ken-
neth Langley told New Ziana
the company's investment in
contract growing of tobacco
was sharply increasing over
the years.
“In terms of direct investment
into tobacco contract farming
for 2015/16 cropping season,
MTC injected $25,5 million,”
he said.
Langley said in addition, MTC
also invested in sustainability
programs involving growing
of tobacco, including industry
initiatives such as establish-
ment of woodlots for curing
purposes.
“At least $1,4 million was put
towards sustainability issues,
bringing the total investment
to $26,9 million,” he said. He
said the company had con-
tracted at least 10 759 grow-
ers, 98 percent of who were
small holder farmers.
“The remaining 2 percent
of our contract farmers are
medium and large scale farm-
ers,” he said.
Mr Langley said while the El
Niño induced weather pat-
tern being experienced in the
country was of great concern,
it did not impact on the MTC
contract farming program.
“We are educating farmers in
terms of planting tobacco in
dry season or anticipating low
rainfall to minimize the effects
of drought on tobacco,” he
said.
MTC is the largest single con-
tractor of small holder tobacco
farmers in Zimbabwe. The
company, which started con-
tracting tobacco farmers in
2004, has been operating
as a leaf merchant in Zimba-
bwe since 1936 and supplies
packed tobacco to global mar-
kets.
Tobacco has become Zimba-
bwe’s major foreign currency
earner, with close to 92 000
farmers growing the crop dur-
ing 2014/15 season, a number
significantly higher than 52
000 farmers three years ago.
Last year the country pro-
duced 198, 7 million kg of
tobacco, down from 216, 1
million kg in 2014 due to a
poor rainfall season. Over the
years, many farmers have
abandoned traditional crops
like maize and cotton in pref-
erence for tobacco due to its
orderly marketing and com-
petitive prices.-New Ziana●
7 news
MTC invests over $26 million in contract tobacco farming
8. BH24
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9. HARARE - Losses dom-
inated today's trades as
the mainstream industrial
index’s bearish form con-
tinued.
The index dropped 1.81
(or 1,72 percent) to settle
at 103.38.
Giant insurer Old Mutual
was again in the red, los-
ing a significant $0,0718
to close at $1,8082, while
NatFoods eased $0,0275
to $2,6700.
Heavyweight Delta shed
$0,0232 to trade at
$0,5500, while FBC Hold-
ings and TSL were each
$0,0100 weaker at $0,0600
and $0,1375, respectively.
The only counter to trade
positively was CFI, which
added a marginal $0,0006
to close at $0,0572.
BAT, Edgars and Willd-
ale were unchanged at
$12,2000, $0,0600 and
$0,0020 in that order.
The mining index was
unchanged at 21.74 as
Bindura, Falgold, Hwange
and RioZim maintained
previous price levels
- BH24 Reporter ●
ZSE9
Equities market extends losing streak
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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
21 January 2016
Energy
(Megawatts)
Hwange 475 MW
Kariba 520 MW
Harare 30 MW
Munyati 27 MW
Bulawayo 20 MW
Imports 0 - 100 MW
Total 1145 MW
21 January 2016 - CZI/Herald Business Annual Economic Outlook 2016 Half Day Symposium; Venue: Meikles Hotel, Harare; Time:
08:30 to 12:50hrs
10 February 2016 - Nampak Zimbabwe Annual General Meeting: Venue 68 Birmingham Road, Southerton, Harare: Time 12:00
THE BH24 DIARY
15. JOHANNESBURG - The rand
was weaker in the morning as
the market awaited the lat-
est policy statement from the
European Central Bank (ECB).
Weaker commodity prices
added to the pressure on the
local currency.
As expected, consumer infla-
tion rose from 4,8 percent
year on year in November
to 5,2 percent in December,
Statistics SA data showed on
Wednesday.
At 8.53am the rand was at
16,8361 against the dollar
from 16,7584 previously.
Against the euro, the rand
was at 18,3556 from 18,2506
previously. It was at 23,8851
against the pound from
23,7803.
The euro was at $1,0901 from
$1,0893 previously.
Barclays Research said in a
morning note that although
today’s ECB policy meeting
was likely to contain more
dovish language, they did not
expect president Mario Draghi
to announce further stimulus
measures, "which together
with persistently subdued
commodity prices, leads us to
believe that the rand is likely
to weaken toward the top end
of the its recent trading range
today".
Meanwhile, local retail sales,
released on Wednesday, rose
much more than expected
in November compared with
a year ago, suggesting that
while consumer spending was
slowing, it had not collapsed.
Sales increased by 3,9 per-
cent year on year in November
after rising a slightly revised
3,4 percent (3,3 percent) in
October.-BDLive●
regioNAL News15
Rand weaker ahead of ECB policy announcement
16. A SELLOFF yesterday gave
global equity markets the worst
start to a year on record, as oil
again tumbled to 13-year lows.
Emerging market assets were
especially hard-hit, as the slide
in oil made traders and inves-
tors increasingly sceptical that
governments and central banks
could shore up currencies and
stimulate their economies.
Developing-country stocks
extended their worst start to a
year ever, currencies slumped
to a record low and the risk
premium on emerging-market
debt climbed to the highest in
more than six years.
Concern that an oil-supply glut
will worsen sent Brent crude
towards the lowest close since
2003, while the slowest growth
in China in a quarter of a cen-
tury damped the outlook for
the global economy.
Brent slipped $1,12, or 3,9 per-
cent, to $27,64 a barrel on the
ICE Futures Europe exchange.
"It’s Black Wednesday for
emerging markets, as a whole
range of bad news whips out
billions of dollars from stocks
and currencies," said Bernd
Berg, an emerging-markets
strategist in London at Société
Générale.
"The rout in emerging markets
could continue for some time,
especially as the major global
central banks have exhausted
their ammunition in recent
years, making it unlikely that
they will rescue global markets
this time around."
The panic pushed Wall Street
deep into the red on its open-
ing. The blood-letting in global
markets dominated corridor
talk last night as business
leaders and policy makers met
in the town of Davos, although
the view so far was that it did
not signal a financial crisis.
The MSCI Emerging Markets
index dropped 3,3 percent in
New York and it was set for the
lowest close since May 2009.
A gauge tracking 20 develop-
ing-country currencies fell 0,9
percent. More than $2-trillion
has been wiped off the value
of developing-country equities
this year, as the MSCI Emerging
Markets index slid 13 percent,
the worst start to a year since
data began to be recorded in
1988.
The drop has exceeded the 7,9
percent decline in the gauge in
the same period in 1998 dur-
ing the Asian financial crisis
and the drop in 2009 amid the
global financial crisis.
internatioNAL News16
Bloodbath as panic engulfs markets
17. internatioNAL News17
The JSE suffered its sharpest
one-day fall so far this year.
The rand weakened to 16,96/$
before recovering in afternoon
trade. The all-share index
closed 2,73 percent down to
46,329.80, with mining, bank-
ing and financial shares the
worst hit.
Major European market indi-
ces, including the FTSE and
Paris CAC 40, fell more than
3 percent. The JSE all-share
index fell 2,72 percent on Jan-
uary 4, the first trading day of
the year. It has closed nega-
tively seven times in the first
13 trading days of 2016 and
is 8,61 percent weaker for the
year.
"It is difficult to call a bot-
tom for this market," Afrifo-
cus Securities portfolio man-
ager Ferdi Heyneke said. "All
the negative news — ranging
from China to US rate hikes to
the drought and low growth in
SA — is affecting our market
badly."
Britain’s blue-chip equity index
entered "bear market" territory
after falling more than 20 per-
cent from its record highs in
April last year. The benchmark
FTSE 100 index ended 3,5 per-
cent lower at 5,673.58 points,
after touching 5,639.88, its
lowest level in more than three
years.
"The FTSE is now in a bear
market," said Brenda Kelly,
an analyst at London Capital
Group. "It’s not a pretty sight,
with every single sector in the
red."
Technical analysts define a
"bear market" as one in which
the index falls more than 20
percent from its previous peak.
The Dow Jones industrial aver-
age dropped 500 points.
Commodity shares remained
at the forefront of the selloff,
with energy companies sinking
further to five-year lows, and
on pace for their worst monthly
slump since 2008.
The Standard & Poor’s 500
index dropped 3,4 percent, the
most in almost five months,
and was on track for its lowest
level since April 2014. The Dow
lost 521.05 points, or 3,3 per-
cent, and the Nasdaq Compos-
ite index fell 3,4 percent.
As the World Economic Forum’s
annual meeting in Switzerland
wrestled with topics rang-
ing from the effect of robots
on jobs to gender and wealth
inequality, the MSCI World
equity index fell to its lowest
since July 2013. If sustained,
the 9,9 percent fall in the
index in January would be the
worst monthly loss since 2009,
towards the end of the global
financial crisis.
"I don’t believe this is a repeat
of 2008... That is not to say
that there are not some very
significant risks impacting the
market — not least of which is
China’s slowing growth," John
Veihmeyer, global chairman of
accounting group KPMG, said
in the Reuters Global Markets
Forum on Wednesday.
The International Monetary
Fund cut its global growth fore-
casts for the third time in less
than a year to 3,4 percent on
Tuesday, as new figures showed
that the Chinese economy had
grown at its slowest rate in a
quarter of a century last year.
While China’s rapid slowdown,
combined with a dramatic fall
in the price of oil, has spooked
investors around the globe,
European Economics Commis-
sioner Pierre Moscovici told
Reuters he too did not believe
there would be any return to an
international financial crisis.
"I don’t feel that the finan-
cial crisis is coming back...
but there are downsides that
we need to address," he said.
"There are worries... especially
about China, which is undergo-
ing a transition (that) is diffi-
cult and uncertain."
However, some in Davos were
less confident about the out-
look for 2016 after the rocky
start to the year.
"There are a lot of things
behind" the selloff, said Ste-
ven Schwarzman, CEO of the
Blackstone Group, from Davos
on Wednesday. "You have
economic things, such as the
slowing of the US economy,
which has been pretty gradual.
You’ve got energy going down
so quickly that you can almost
get windburn. You’ve got China
as an issue, which is probably
overdone," he said.
"So when you put those factors
together, you have an unat-
tractive brew along with the
concern the US Federal Reserve
will raise rates and slow the
economy further."
Bloomberg, Reuters,
Maarten Mittner●
18. If an equilibrium exchange rate is
one where importers and exporters
are equally unhappy, then the rand
at close to 17 to the dollar should
have exporters dancing in the
streets. A few are.
Farmers, miners and tourism oper-
ators are some of the sectors gain-
ing from extreme rand weakness.
Commodities are usually best
placed to benefit from a weak cur-
rency because they are exported
in extracted form, so producers
receive the dollar price with little
to detract from it in the way of pro-
cessing costs.
For instance, the prices of South
African wool have surged to record
levels, gaining more than 14 per-
cent in the past week alone, thanks
in part to the weak rand. This is the
largest recorded increase between
consecutive auctions in the past five
years, according to Cape Wools.
As wool is traded in US dollars but
farmers are paid in rand, there is an
almost perfect correlation between
the drop in the rand-dollar exchange
rate and farmers’ revenue.
The same should hold for mining.
However, Chamber of Mines CEO
Roger Baxter counters that while
rand weakness has provided relief
to some miners, especially in the
gold sector, it hasn’t compensated
fully for the collapse in the com-
modity prices of other chief South
African exports such as iron ore and
coal.
"The weak rand is not a boon for
mining," Mr Baxter says. "There
are just too many domestic factors
challenging the industry — from
Eskom’s demand for further tariff
hikes to the planned introduction of
a carbon tax."
Tourism should be another clear
winner from the weak rand. How-
ever, while Statistics SA data show
the number of foreigners visiting SA
grew by 3 percent in October 2015
year on year, the number of over-
seas arrivals was down 0,3 percent
in the same period.
"The exchange rate will play a big
role in 2016," says Southern African
Tourism Services Association CEO
David Frost. "If we can get rid of
the last shackles imposed by home
affairs on unabridged birth certifi-
cates, this would help. We have the
opportunity to claw back lost mar-
kets and open up new segments."
Mr Frost finds it "unfortunate",
therefore, that some luxury lodges
have reportedly attempted to push
up prices by 10 percent -20 percent
to capitalise on the weak rand.
"My sense is that we should be
using the exchange rate to our ben-
efit and our growth rates (for over-
seas arrivals) should be (in) double
digits," he says.
The manufacturing sector should
also be humming. Not only does
rand weakness make exports more
competitive, but pushing up the
prices of imported goods should aid
domestic substitution of these prod-
ucts. However, manufacturing pro-
duction has declined in five of the
last 12 months and the sector is on
the brink of a recession.
Manufacturing Circle executive
director Philippa Rodseth believes
the rand’s depreciation will result
in increased exports in the coming
quarters, noting that it can take six
months or more for customer sup-
ply chain obligations to be unwound.
Unfortunately, the sector is ham-
strung by low demand from export
destinations, rand cost increases for
imported inputs and exchange rate
volatility, which affects planning.
Tru-Cape Fruit Marketing, the larg-
est apple and pear marketing com-
pany in SA, is a case in point. While
the weaker rand has increased its
export revenue, it has also caused
the cost of imported inputs to soar.
In the coming year, the company
expects packhouse and farm costs
to rise by almost 30%, driven by
packing material and post-harvest
chemicals, both of which are priced
in dollars.
The company has also invested
in the latest imported technology
including flow-wrap machines and
internal defect cameras, at a total
cost of more than R20m to stay
globally competitive.
"If our industry doesn’t get the
break from a weak exchange rate,
we won’t survive," says Tru-Cape
chairman Pieter Graaff.
- BDLive●
18 analysis18 analysis
Weak rand’s profit wand makes magic for only a few