Investment Quarterly Magazine Q1 2021

WZihmebnaSbowueth‘liAtefrraicllay’sncaeteczheess, Riding the Covid-19 second Conspiracy theories surrounding Market bubble or rising inves-
the cold. P10 wave P16 /Ruth Dandawa the vaccines in Africa P20 tor optimism? P24
/Gamu Pasi
/Ranga Makwata
INVE STME NT/JamaicaTongowona
QUARTERLY
Q1 Edition 2021

2021

flaFtutellrionfgptroomdeicseesivoer?

Q1 Edition 2021 | Investment Quarterly 1

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2 Investment Quarterly | Q1 Edition 2021

Editor’s note

Welcome to the first issue of the Invest- INVESTMENT QUARTERLY
ment Quarterly Magazine of the year MAGAZINE
2021.
The year started with the country reverting to the 10 Londonderry Ave
hard lockdown necessitated by the spike in Covid-19 Eastlea, Harare
infections and related deaths. Tel: +263 787 629 333
Mobile: +263 733 016 576
The discovery of the new coronavirus strain in Email: [email protected]
South Africa, now widely referred to as the South Af- Directors:
rican variant, which is more lethal than the original Ranga Makwata, Rufaro Zengeni
Covid-19 virus, resulted in the daily increase of new Managing Editor
infections and deaths. Jamaica Tongowona
Staff writers:
The world has embarked on the biggest vaccination Ruramai Gatsi
campaign in history with the aim of achieving glob- Ruth Dandawa
al immunity. For Zimbabwe, the race to achieve herd Tinashe Majiga
immunity largely rests with the success of the vacci- Tavonga Njaya
nation in South Africa. Will life return to normal after Guest writers:
the inoculation of the global population? Gamu Pasi
We review the impact of the second wave lockdown Jonathan Mbulay
on the economy as well as the anticipated third wave Lavender Marisa
and its effect on the projected 2021 economic out- Caroline Chidziwo
turn. Pastor Tirangane Tivafukidze
Advertising:
This issue also reviews the stock market rally in the Ruth Dandawa [email protected]
first quarter of 2021. +263 788 738 975, +263 787 629 333,
Happy reading and please feel free to write back, we + 263 733 016 576
value your feedback. Editorial:
Jamaica Tongowona Jamaica Tongowona [email protected]
Managing Editor +263 772 768 364, +263 733 016 576, +263 787
629 333
Magazine design & layout:
Jonathan Mbulay
+263 783 574 363 / +2633 719 697 070
[email protected]
[email protected]
Photographer :
Allen Matutu:
[email protected]

Q1 Edition 2021 | Investment Quarterly 3

6 Contents
28 14

31 6. 2021: Full of promises or flattering to deceive?

4 Investment Quarterly | Q1 Edition 2021 /Ranga Makwata

10. When South Africa sneezes, Zimbabwe

‘literally’ catches the cold/Jamaica Tongowona

14. The impact of the second Covid-19 wave on

First Mutual Life Assurance business and economy

/FMHL

16. Riding the Covid-19 second wave /Ruth Dandawa

20. Conspiracy theories surrounding the vaccines

in Africa /Gamu Pasi

24. Market bubble or rising investor optimism?

/Ranga Makwata

28. Small caps outpace blue chips in 1QY21
/Lavender Marisa

31. Will the RBZ be able to control M3 growth?

/Tavonga Njaya

36 34. Of Fuel prices and market distortions /Tinashe Majiga

36. Where to my beloved Zimbabwe in 2021

/The Thinking Man

38. A kite against the wind /Pastor Tirangane Tivafukidze

42. How to find your hidden creative genius

/Jonathan Mbulay I.

42

Q1 Edition 2021 | Investment Quarterly 5

2021: Full of promises
or flattering to
deceive?

This year, 2021, see a reversal of the declining gross
seems to have start- domestic product (GDP) which,
ed where 2020 end- for the last two years had been
ed. Or is it worse? characterised by a continuous de-
With the nightmare cline. On the bright side and with
of containing COVID-19 infec- a touch of underlining optimism,
tions, the unexpected contin- government expects econom-
uation of 2020 anxiety, this as- ic growth of 7.4% in 2021, and
sumption of a worse year can other independent players largely
be deemed true. An analysis of concur with government on the
possibilities and threats is im- direction which the economy will
perative in evaluating whether take, albeit with differences only in
this year is full of promise or the magnitude. Growth in 2021 is
flattering to deceive. conceivable but 7.4% as projected
by Finance minister Mthuli Ncube,
Many may have expected the looks overly optimistic for some,
nightmare experienced in 2020 to especially as theCOVID-19 pan-
end in that year and for normal life demic still looms large. At best a
to return in the new season. Unfor- 3% growth with stagnation or a
tunately, we had to start 2021 with decline is still very much possible.
strict lockdown measures which
had been necessitated by the grow- To be sure, the basis of the preced-
ing infections and deaths linked ing optimistic assertion is strongly
to the coronavirus. This obvious- expected from the agriculture and
ly has a bearing on the economy, mining sectors. The rains have
amidst concern of a third consec- been good, although in some re-
utive year of decline, even despite gions they have become excessive
upbeat official projections from and destructive. For well-prepared
some authorities. farmers, good yields are expected.
However, there are few such farm-
Ranga Makwata From an economic perspective ers, compared to the majority who
according to sources in official cir- traditionally rely on government
6 Investment Quarterly | Q1 Edition 2021 cles, 2021 within is still expected to

handouts through various input ucts and services. declare this as a foregone conclu-
schemes. Sometimes these inputs sion because there’s still room for
come late and almost always tend The national treasury is expect- some acts of God to determine
to be inadequate. This obviously ed to only spend capital on pur- the final outcome. For instance, ex-
affect yields. chasing produce from the farmers cessive rains could ruin a big pro-
for storage purposes at the Grain portion of the maize crop while
Be that as it may, a much bigger Marketing Board (GMB). Howev- pest outbreaks remain a threat as
harvest is expected this year and this er, farmers are most likely to be always. Moreover, cash crops like
seems to be a realistic expectation. paid in Zimbabwe dollars, and this tobacco and cotton are always
Official estimates put this year’s comes with its own set of prob- susceptible to price fluctuation on
maize harvest at 2.8 million met- lems. Generally, the bone of con- their respective markets; hence a
ric tonnes. This will be more than tention is that people are not com- change in market trends could also
double the 900,000 tonnes harvest- fortable to store their wealth in trigger a negative outcome. A turn
ed, compared to the 2019/2020 local currency, which means most to the mining industry may present
season. Maize is the staple crop for farmers will quickly convert their some flattering projections.
Zimbabwe with the country con- Zim dollar into USD at the parallel
suming about 2.2 million tonnes. market. This could add to the pres- Mining is another big contributor
Of this quantity, 1.8 million is for sure on the Zim dollar as its supply to economic performance in Zim-
human consumption while 350,000 increases relative to USD. babwe. In fact, it is the biggest con-
tonnes goes to stock feed. The an- tributor to export shipments for
ticipated bumper harvest would Besides grains, other crops like to- the country. In 2020 mining con-
mean that this year the country will bacco and cotton are also expected stituted 70% of the exports and it
have more than enough grains for to do well. These crops are USD earned the country US$3.3 billion.
consumption without resorting to dollar denominated since they are Platinum contributed 54% of min-
imports. Maize imports in 2020 predominantly exported, hence a eral exports in 2020 (same contri-
amounted to US$297.8 million ris- good outturn on these two means bution as in 2019) while gold con-
ing from US$26.7 million in 2019. increased foreign currency earn- tributed 30% in 2020 down from
With a surplus to stock up as a na- ings for the country. Combined 37%. The stability in platinum
tional reserve, the country will not with a massive saving on maize contribution is probably because
need to spend a dime to import imports, this should mean a posi- it is produced solely by companies
maize. This is a major saving on tive net contribution to forex gen- which stable operations.
foreign currency which should be eration by agriculture activities in
used to pay for other critical prod- 2021. Of course it is too early to While some of the gold is pro-

Q1 Edition 2021 | Investment Quarterly 7

duced by corporates, a significant perhaps? like manufacturing and tourism.
chunk comes from artisanal min- However, these are expected to be
ers. Gold deliveries to Fidelity The contribution by remittances less significant because of different
Printers and Refiners (FPR) for in 2020 was quite significant with operational problems they are fac-
2020 declined by 31% to 27.66 the diaspora remitting US$1 billion, ing. For tourism, travel bans have
tonnes. Primary producers i.e., cor- up 58%. This is rather surprising brought it down to its knees while
porates maintained their deliveries because in most countries where only few manufacturing entities
at around 10 tonnes but for artis- Zimbabweans are based, stringent are still viable. There is a cause for
anal miners it dropped to 9 tonnes lockdowns affected their income optimism in 2021, we should not
from 17 tonnes. Side marketing is generation. It could not have been get carried away and forget that
blamed for this dropped. This is to savings since the competitive nature COVID-19 remains a big threat to
be expected because small players of those countries make it difficult both lives and economic activities.
are always looking to sell to the buy- for immigrants to save. As rightly Also, perennial policy blundering
er offering good prices and paying observed by Reserve Bank of Zim- that has stalked Zimbabwe for for-
in the right currency. Prices offered babwe (RBZ) in its monetary pol- ty years is still a cause for concern.
by FPR are usually not competi- icy statement (MPS), many people In particular reckless printing, qua-
tive and sometimes payments are felt more comfortable to channel si-fiscal activities, corruption and
delayed. The other problem is the funds through formal outlets after excessive regulation bordering on
payment of miners, partly or whol- government allowed recipients of interference in private business
ly in local currency with conver- funds to use them freely. What is affairs are some of blemishes to
sion done at official exchange rates apparent from this situation is that watch out for. We have gone back-
which are way below market rates. excessive control is counterpro- wards significantly from the prom-
For deliveries to improve in 2021, ductive as it forces people to avoid ises of ‘open for business’ which
the price has to be close to inter- formal channels. It happens with were made in 2017. Since then,
national markets level; payments remittances, it happens with gold foreign investors have been leav-
should be done without delays and deliveries and indeed it happens ing the country in large numbers
the miners have to be paid in US everywhere where players feel gov- in the last three years resulting in
dollars or at market rates if paid in ernment is overplaying its hand. massive capital loss. All the same,
Zimbabwe dollar. It is unlikely that If the liberation persists, then re- the expectation (or is it hope?) is
the drop in deliveries for 2020 was mittances will still be significant that 2021 should end better than
caused by an equal drop in produc- in 2021 albeit constrained by level it has started. Needless to say, the
tion. Rather, the artisanal produced of economic activities in countries perception on whether we sink or
more or less the same quantity but where the Zimbabwean Diaspora swim this year lies entirely upon
sold less through FPR because the is based. whether citizens decide to view the

terms were not favourable. A like- Besides mining, agriculture and facts on the ground as negative or
ly more controlled financial player the contribution from the Diaspo- positive. What’s your take?
such as remittances may probably ra, the country also generates eco-
offer a stable financial perspective nomic value through other sectors

8 Investment Quarterly | Q1 Edition 2021

Q1 Edition 2021 | Investment Quarterly 9

WsnheeenzeSs,oZuitmh bAafbriwcea
‘literally’ catches
the cold

Truth be told, South hit South Africa hard and saw that
Africa has the polit- country retreating back to a hard
ical and economic lockdown. The new COVID-19
clout in the region strain was also found in Zimbabwe
and any develop- with officials noting that 61% of
ments in that country have an the infections in the second wave
impact in the whole region. were of the lethal new variant. Just
As the new adage goes, when as the human and vehicular traffic
South Africa sneezes all her travel from South Africa north-
neighbours catch a cold. This bound into the regional countries,
has literally played out during the contagious COVID-19 variant
the outbreak of the ravaging also found its way into the region.
COVID-19 second wave and This is depicted on the regional
worsened with the discovery of countries’ daily statistics on new
the new COVID-19 strain, wide- infections and deaths from the vi-
ly referred to as the South Afri- rus.
can variant, which is more lethal
than the original COVID-19 vi- Country Deaths Cases Case
rus. The relaxation of hard lock- Fatality
down restrictions in late 2020 by Rate %
most countries in the region ex-
acerbated the situation and the South Africa 21,477 787,702 2.73
consequences were to follow in
early 2021. Zambia 357 17,608 2.03
2.29
Having managed to contain the Angola 346 15,103 2.62
impact of the coronavirus outbreak 2.77
when it was first reported in late Dem.Rep. of 333 12,702
January 2020, the COVID-19 grim Congo
reaper eventually came down heav-
ily on Zimbabwe in the first quar- Zimbabwe 276 9,950
ter of 2021. The second wave also
Malawi 185 6,025 3.07

Namibia 151 14,345 1.05

Mozambique 130 15,613 0.83

Eswatini 121 6,410 1.89

Lesotho 44 2,109 2.09

Botswana 31 10,258 0.3
Tanzania
Jamaica Tongowona 21 509 4.13

10 Investment Quarterly | Q1 Edition 2021 Zfn/Bloomberg 30 December 2020

there are reports that private com-
panies have approached govern-
ment intending to procure the vac-
cines for their employees and the
workers’ immediate family mem-
bers. Medical aid societies have also
expressed interest in procuring the
doses for their members.

The economy and
vaccination
As of early March, new infec- MoHCC 26 November 2020

tions and deaths had eased in While the po-
South Africa and Zimbabwe but
rising in other neighbouring coun- litical leadership
appear to have
tries. There is an anticipated third been proactive
wave that many experts project is
currently in the offing, after the re- in adopting the
COVID-19 vac-
laxation of lockdown restrictions cination pro-
both in South Africa and Zimba-
bwe. The third wave is also expect- gramme early
and ahead of
ed to be worsened by the coming many countries
winter season. But this also comes
as South Africa and Zimbabwe Zimbabwean authorities have inMoHCC 25 February 2021 the region,
there has been
have embarked on an ambitious announced plans to vaccinate 10 also some relative stability in the
vaccination programme. And as million or 60% of the population economy. The good rain season
countries across the world race to with doses from China, India and has also managed to bolster the
vaccinate their citizens with the aim the UN initiative COVAX facility, economic prospects with the coun-
of achieving herd immunity, it is which aims to provide all coun- try reportedly expecting record
now apparent that for Zimbabwe, tries in the world with access to bumper harvests.
the race to achieve herd immuni- vaccines. Notably, Zimbabwe be-
ty largely rests with the success of came the first country in Africa to Despite the negative impact of
the vaccination in South Africa. If approve the use of Indian vaccine. COVID-19 which largely disrupted
South Africa sneezes again, Zim-
supply chains
Doses Doses per % of population Fully Daily rate of for the better
babwe will catch the cold.
Country Administered 100 people given 1+ dose part of 2020,vaccinated doses administered
Case 0.2 - 4,896 the Confed-
Country Deaths Cases Fatality South Africa 101,573 0.17

eration ofRate %
Zimbabwe 31,235 0.21 0.2 - 2,797

South Africa 50,647 1,520,206 3.33 Z i m b a b w eMoHCC 25 February 2021
Zimbabwe 1,485 36,260 4.10 As at 7 March 2021 the global Industries (CZI) manufacturing
Zambia 1,124 82,421 1.36 vaccination campaign table showed survey showed that industry ca-
Malawi 1,067 32,398 3.29 that many countries in Africa and pacity utilisation jumped to 47%
D R Congo 712 26,469 2.69 most importantly in the Southern in 2020 from 34% in 2019. The in-
African region are yet to start vac- dustrial performance was attribut-
Mozambique 686 62,131 1.10 cinating their citizens. In the re- ed to the exchange rate stability

Eswatini 658 17,173 3.83 gion, South Africa and Zimbabwe brought about by the introduction

Angola 512 21,055 2.43 were the only countries to have of the auction system in June 2020.

Namibia 437 39,877 1.10 given notable doses and continue However, the extended lockdowns

Botswana 359 31,746 1.13 to do so. getting into 2021 have continued

Lesotho 307 10,523 2.92 Apart from the vaccination drive to constrain industry operations,
steered by the central government, worsened by the lack of work-
Tanzania 21 509 4.13

Zfn/Bloomberg 30 December 2020

Q1 Edition 2021 | Investment Quarterly 11

When South Africa sneezes, Zimbabwe ‘literally’ catches the cold

ing capital and stimulus packag- cultural sector. There were also no of the projected 60% of the pop-
es promised by the government indications whatsoever regarding ulation before the end of the year.
which resulted in some firms fail- the amount and when the other The question on the efficacy of the
ing to resume operations or strug- package to support local industry vaccines the government has opted
gling to re-establish supply chains. would be available for drawdown. for, however, remains outstanding
and an argument for another day.
The government announced the The good economic prospects The conspiracy theories around
ZWL18 billion stimulus in 2018 this year to date therefore are ex- any vaccination are always expect-
but the facility was shrouded in pected to help with resources to ed given the different cultural and
opaqueness. It was only recently fund the procurement of vaccines religious beliefs among the popu-
that Treasury announced, through that are critical in achieving herd lation. For now it is important to
its permanent secretary George immunity along with other neigh- vaccinate and achieve herd immu-
Guvamatanga that, it had taken a bouring countries for the economy nity in order to avoid the dreaded
deliberate strategy to channel the to operate fully without the lock- third wave which will certainly re-
ZWL18 billion towards support- down restrictions. The Ministry sult in another hard lockdown and
ing agriculture. As is the case with of Finance has announced a war further travel restrictions.
many other such facilities, there chest of US$100 million to fund
was no breakdown as to how the the procurement of vaccines every
package was distributed in the agri- fortnight to ensure the inoculation

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E: [email protected] E: [email protected]
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12 Investment Quarterly | Q1 Edition 2021

A product of Zfn

INVESTMENT
QUATERLY

CONTACT

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E: [email protected]

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JAMAICA TONGOWONA

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A product of Zfn Q1 Edition 2021 | Investment Quarterly 13

The impact of the
second Covid-19 wave
on First Mutual Life
Assurance business
and economy

The Covid-19 cas- related. The increased claims were adverse conditions. A reinsurance
es in Zimbabwe more pronounced from the festive arrangement occurs when an in-
were generally low season through to mid-February. surance company transfers part of
in 2020 in relation However, besides the pronounce- its risk to a reinsurance company
to other African ment of the second lockdown, the thereby sharing the exposure to the
countries. The country was high death rate from the second same risk. In the event of a loss
hit with a second wave of the strain was enough warning to the happening, the two entities, that
CORONAVIRUS at the end of citizens not to break lockdown is, the insurance company (First
year spiralling the number of measures, mask mandate, quar- Mutual Life) and the Reinsurance
new infections and unfortunate antine mandate, self-isolation and company both participate in pay-
loss of lives. On a positive note vigorous testing. This has also ing the claim. This arrangement
however, a significant number played a pivotal role in the curve significantly reduced the impact of
of recoveries were recorded re- starting to flatten again. the high death claims experienced
sulting in the recent easing of for the period commencing the
the lockdown restrictions by the Impact of claims on First festive season up to February 2021
Government. Mutual Balance Sheet and ensured the balance sheet re-

Increase in claims Despite the surge in deaths during mained strong.
As Zimbabwe experienced the the second wave, claims were ef- Impact of increased
CORONAVIRUS effects, not only fectively processed owing to ro- death claims to internal
was the economy and insurance bust underwriting measures by processes
the business. Further, to ensure
industry affected, First Mutual as that we are able to meet claims, Thankfully, when the second wave
a business also experienced an up- the business has in place reinsur- struck, the internal staff and in-
surge of death claims with most ance arrangements which help us ternal processes were equal to the
of the claims being COVID-19 to absorb claims when faced with task. More than 85% of our em-

14 Investment Quarterly | Q1 Edition 2021

The impact of the second Covid-19 wave on First Mutual LifeAssurance business and economy

ployees were working from home and the actual burial. people with underlying conditions
ensuring business continuity in- may face challenges should they
spite of the remote working. Re- wish to get higher sums assured in
duced travel for clients to physical Is there a third wave and life assurance.
offices meant that queries could be
solved in a shorter time and from what’s next?

the comfort of the client’s home. There has been increased worries The solution is for an organisa-
Contrary to the general belief that over a third wave post 2021 Eas- tion to take up life assurance as
clients might find the transition to ter holiday. The virus is known to a group. This takes care of the
digital business tools a dissuasion, thrive in cold winter weather and two main problems we discussed
clients were quite happy with trans- thus most southern African coun- above. Group Life Assurance has
acting, and resolving queries virtu- tries are on alert. Dr. Richard Pugh relaxed underwriting terms and as
ally as it also saved our them time who works at one of the UK top such even members with underly-
and money to travel to our offices. hospitals also hinted through BBC ing conditions are accommodated.
Skeleton staff remained at the of- that a third wave was inevitably Most importantly Group Life As-
fice to assist with the few physical coming. The fight is still far from surance cover does not have wait-
enquiries that came through to the over and apart from ensuring that ing periods, as such members can
offices. instantly be covered upon sign up.

Going Beyond with our we follow the safety recommenda-
clients during Covid-19 tions from the medical fraternity,
we also have to ensure that our fi-
COVID-19 sicknesses and deaths nancial affairs are in order in prepa- For companies who already have
were surrounded by stigma and ration for the worst case scenario. Group Life Assurance cover, the
fear as people were not yet ful- The two secret strategies biggest challenge they may have
ly knowledgeable of the extent to protecting yourself is that the benefit is based on ba-
of damage the novel virus could from the pandemic sic salary which is way lower than
have on third parties, thus deaths The greatest problem is getting in- the total salary received which can
which occurred outside the hos- surance cover during a pandemic is include added benefits. As such,
pitals became a huge challenge to because life assurance cover usually the ultimate value of their benefit
the bereaved families. The public has minimum of 3 months waiting is low. Companies in this category
hospitals facilities and other pri- period to cover the insurer from can update the basis of their salary
vate funeral services companies moral hazard, which can be de- from basic to total salary there by
were overwhelmed with inquiries fined as an insured who enters into providing a higher benefit for their
of body removals. First Mutual an insurance contract in bad faith. employees.
assisted clients with funeral and However, when there is a pandem-
burial services through the recently ic as serious as COVID-19 which For more information and financial plan-
launched First Mutual Funeral Ser- had a high death rate in the first 21 ning advisory services please contact:
vices business. It offers high qual- days, waiting for three months is Tendai Munyawiri or Simbarashe
ity and affordable funeral services not an option. Musukumidzwa
including body removal, mortuary First Mutual Life Assurance Company
storage, washing & dressing, re- The other challenge people may 100 Borrowdale Road, Borrowdale
face to get insurance during a pan- HARARE
demic like COVID-19 is medical Telephone +263 4 886018-38
construction, embalming, chapel, Email: [email protected]
caskets and coffins, hearse, mourn- [email protected]
ers’ transport, blankets, laces and
flowers, graves, burial equipment, underwriting will be stricter, thus

Q1 Edition 2021 | Investment Quarterly 15

Riding the Covid-19
second wave

While the coro- ing important business documents
n a v i r u s and packages.
(COVID-19)
lockdown has Home Delivery

undoubtedly presented a host Delivery drivers are now the most
of challenges for business of essential workers, with the govern-
all sizes, those that do not qual- ment recently recognising the vi-
ify as essential businesses may tal role that couriers are playing in
have been forced to close their keeping the nation fed and provi-
premises. For others, they could sioned. Understandably, there has
stay open to face the changed been a huge spike in the number
economic landscape which of home deliveries during lock-
we are all trying to survive in. down. As a result, couriers have
However, it is important to re- been hailed as the ‘unsung heroes’
member that just as there are of the pandemic, as they work in-
challenges; it has also brought credibly hard to make sure com-
up opportunities for many pro- munities get what they need.
fessionals to brush up on their
skills and competencies. As the With an increase in home deliveries
article will point out, many op- comes the requirement for more
portunities have arisen for those people to work as couriers during
who have positively embraced this time and potentially beyond.
unsolicitaed change. This presents an opportunity for

Working from Home

Ruth Dandawa Staying at home and physical
distancing is proving to be es-
16 Investment Quarterly | Q1 Edition 2021 sential in stopping the spread
of the coronavirus and keep-
ing safe and well. The conse-
quences of doing this includes
not being able to do everyday
things such as posting parcels,
sending of gifts, and distribut-

people who are out of work – po- trade to a new dimension. E-com- dented need for the internet.
tentially due to the pandemic – to merce sales mostly of retailers have
find temporary part- or full-time seen an uptick in office supplies, Embracing new commu-
work as a delivery driver. A driv- whereby many businesses had to re- nication technologies

ing licence is all that’s needed to sort to working from home due to Although there are many adverse
get started on what could become lockdown. An increase in sales for consequences of the lockdown,
a long-term career. health, fitness, beauty, cosmetics, people cannot doubt the obvi-
toys, housewares, home improve- ous value and convenience of this
Online shopping ment, education (home schooling) adoption of technology. People of-

The confinement measures have and electronics products has been ten thought to themselves that the
accelerated already growing trends experienced. A good online pres- internet has opened up the busi-
in online shopping leading to a re- ence must include both the best ness world to everyone. One can
markable increase in e-commerce. and user-friendly website, as well as literally start and run a business
Many products ordered online are participation on social media and without ever leaving the comfort
being shipped across borders in in- online advertising. Whenever one of their bed; simply by making use
dividual consignments, in what is needs a new pair of shoes, they no of the internet’s marketing tools
known as parcel trade. This trade longer go into town to find shops, as well as the feasibility of finding
has helped business to maintain but rather a quick search on Face- products online. As a case in point;
economic activity and for consum- book shows them all they can find, there was a story about a young
ers to access their essentials. as well as a reliable delivery service; Brazilian girl who started her own
usually provided by the seller. drop-shipping company at the age
Essential items have seen a spike Most supply chains were strained of fourteen. She gets orders from
in both online and public services locals for things they cannot ac-
providers, that is with the inclusion and businesses overwhelmed, and quire using traditional means; buys
of food and beverage, medical consumers have come to see that them off Amazon or AliExpress
supplies and various types of med- shopping online offers them time and then delivers them to their
icines like gloves, masks, cough savings and efficiency, even though doorstep. The entire process is
medicines and pain relievers. Other some are expected to go back to done from her smartphone; and
buying trends and with the use of the on the ground purchasing. An- she never gets to leave the house.
courier services for delivery began other important motivator for con-
sumers has been the realisation that So it sounds simple and easy, but
to stand out. they don’t need to sacrifice securi- there are some challenges attached
ty for convenience. Being forced to the new opportunities that may
Social Media Marketing

The rise of e-commerce and social to stay at home and limit physical make the dream tumble quickly
media marketing has both brought movement has created an unprece- into a bleak reality. Specifically for

Q1 Edition 2021 | Investment Quarterly 17

Riding the Covid-19 second wave

Zimbabwe, one worries about lim- to look for the goods. This will in
itations such as reliable internet, turn help service providers in ex-
the price of that internet as well panding their production levels as
as an unpredictable power supply. well.
It is frightening to consider that
one might have a good idea; but All is well that ends well

fail to deliver because of these lim- The arrival of new COVID-19
itations, thereby accumulating ex- vaccines is also a source of hope
penses, debt and a bad reputation. that perhaps one day soon life will
It therefore becomes necessary for return back to normal. Maybe even
one to have a significant enough sooner, we will have new trading
investment in order to hedge the platforms that consider the lim-
business and grow it to success. itations surrounding the business
However, with Zimbabwe’s current world and mitigates their effects
economic climate, very few people for the benefit of all, which would
have the means to barely survive, be exciting and great if someone
let alone fund a business. For many, created an online store that takes
the new opportunities still remain into account Zimbabwe’s econom-
hopelessly out of reach. ic climate and currency limitations.

Smart logistics and pro- As we look forward to such a
curement of household future, there are some things that
essentials one definitely would not want to
go back to, sanitising of hands a lot
Every company aims to minimise more frequently. There is also very
costs and maximise profits; smart little incentive to physically attend
logistics is the key savings driver meetings; since we have found on-
and a growth lever in the connect- line meetings to get the job done at
ed supply chain ecosystem. Man- much less monetary and time cost.
aging and executing the physical But what many people do miss
flow of goods from the point of the most is the walk-in shopping.
origin to the point of consumption There is something about walking
is an essential part of the supply into a store and having a feel of a
chain. The movement restrictions new dress, comparing it to others
of people has made it easier for and even trying it on that the inter-
companies of mainly perishables net simply cannot replicate. I sup-
and medicals products to deliver pose the future will benefit from
their goods just in time due to less the “new normal” as the world
traffic and congestion that might comes back into full swing.
hinder their movement.

Families feed count has increased
considering the fact too many peo-
ple are staying indoors now includ-
ing school kids and teenagers. The
increase in food consumption has
made many retailers providing es-
sentials stock up and store so that
consumers whenever they have the
urgency need of something since it
is lockdown they will be no need
to move around in different places

18 Investment Quarterly | Q1 Edition 2021

Q1 Edition 2021 | Investment Quarterly 19

Conspiracy theories
surrounding the
vaccines in Africa

Merriam-Web-
ster dictionary
defines a con-
spiracy theory
as “a theory
that explains an event or set of
circumstances as the result of a
secret plot by usually powerful
conspirators”. It is a belief that
some covert but influential or-
ganization is responsible for an
unexplained event. In general,
the theory is based on suspicion There has been a claim that Mic-
and that we cannot view any situ- rosoft co-founder Bill Gates wants
ation at face value. Such has been to eliminate at least 3 billion people
the problem with the coronavirus in the world, starting in Africa, in
vaccine especially in Africa. a plot involving vaccines. The rea-

Yes, there is an acknowledgement son for the elimination some say is
that the disease is there but the vac- that Africans are ‘useless’ and don’t
cine thereof is causing suspicion. add up to the global economy and
The virus did not start in Africa their existence is somehow irrele-
but the vaccine’s penetration to vant. Robert O. Young speaking on
the continent has been faster than a panel for the International Tribu-
the impact of the virus. In general, nal for Natural Justice said, “In the
Africa has been exposed to some words of Bill Gates, at least 3 billion
ill-treatment from other continents people need to die,” Young said.
through events like colonisation, “So we’ll just start off in Africa,
slave trade and so forth from histo- we’ll start doing our research there,
ry. The question many have raised and we’ll eliminate most of the Af-
is why Africa seems to be getting ricans because they’re deplorable.
preference this time around on the They’re worthless. They’re not part
vaccine? of this world economy.”
Gamu Pasi

20 Investment Quarterly | Q1 Edition 2021

Conspiracy theories surrounding the vaccines in Africa

Scary isn’t it? According to Asso- Clergyman have also added their
ciated Press (AP) Gates never said voices to the pandemic with local
this. The billionaire philanthropist prophet Emmanuel Makandiwa
has spoken about the benefits of saying why can’t African govern-
slowing the rate of population ment take their time to verify these
growth, but he has not advocated vaccines? Also he asked whether
killing people. Considering how there is no vaccine for Africa? “The
sensitive Young’s claims are, you vaccine is coming from the same
also get to wonder why he was not people you’ve warned us against in
arrested. Food for thought. your political rallies. Why ride on
their teachings today?” South Af-
India’s opposition Samajwadi rica soon after importing the John-
Party leader Ashutosh Sinha sug- son & Johnson vaccine was ques-
gested that the vaccine may be tioning its effectiveness. However,
used for population control by soon after the same vaccine was
making people impotent, adding to approved.
the same claim of depopulation.
In the case of Zimbabwe, nat-
During the initial days of the ing enterprise that causes medical ural remedies have proved to be
coronavirus outbreak, an incom- harm”. The video also suggested very effective on the more practi-
prehensible theory about 5G - the that powerful elites were complicit cal front, in people’s homes. Using
next-generation wireless network in the virus outbreak and stand to zumbani, lemons, garlic, ginger etc.
technology - causing the health profit from it. have proved helpful despite no full
crisis made its way to social media endorsement from the health min-
platforms. The conspiracy theo- On the issue of lockdowns and istry. Can we not ride on that and
rists pointed to the installation of wearing of face masks, Tanzania have lasting solutions for the econ-
5G towers in Wuhan, China, be- omy concerning the pandemic?
fore the virus outbreak. The Fed-
eral Communications Commission has never had any of the two. It has Other African concerns include
of the United States had to release been business as usual and anyone things like hunger, which is be-
a statement to quell the rumour. entering the nation has been asked lieved to be killing more people
to remove masks and throw them than coronavirus. In the case of
A 26-minute video titled ‘Plan- in a bin. Surprisingly, the coun- Zimbabwe, more people died in
demic’ was uploaded on YouTube try has had a cumulative number 2018 compared to 2020. Also, are
which claimed the pandemic was a of infections of only 509 and 21 we going to be safe after being vac-
planned health crisis. In the video, deaths. We then wonder whether cinated? There is a suggestion than
a discredited medical researcher, it is an issue of underreporting or more vaccines will be needed on
Judy Mikovits, asserted that face maybe lockdowns and facemasks top of the one. Other questions
masks “activates your own virus” are overrated. In this era of social making rounds is on the wearing of
and vaccines are “a money-mak- facemasks - if COVID-19 is trans-
media, even if the gov-
ernment underreport mitted via saliva, why are PCR tests
cases - you certain- being done through a very painful
ly can’t hide it when way through the nose? Saliva could
people are dying. Well be way easier just like those urine
recently the president samples. Be that as it may, the is-
of Tanzania, John Ma- sues surrounding the coronavirus
gufuli was reportedly vaccine in Africa are still very much
sick after COVID-19 surrounded by uncertainties that
infection but the gov- leave the general public in a state
ernment denied the of confusion rather than relief.
claims.

Q1 Edition 2021 | Investment Quarterly 21

The Impact of Covid-19 fully operational during this tran- to Covid-19, all statutory returns,
on Securities and Ex- sition through use of teleworking audited financial statements and
change Commission of and staff rotation and has man- various compliance documents
Zimbabwe (SECZ) busi- aged to execute its regulatory man- are being filed online, with a por-
ness and Capital Market date through the use of various tal currently under development to
technological platforms available. ease the process of statutory re-
The Securities and Exchange All Securities Market Intermediar- turns filing. The portal will create
Commission of Zimbabwe and ies embraced technology as a tool a consolidated audit trail database
the securities market have not been for their operations with Securities that will enable the SECZ to con-
spared by the effects of the Co- dealers (brokers) trading at their duct cross-market surveillance in
rona Virus (Covid-19) pandemic. offices or homes. real-time.
The Commission implemented
various initiatives as a work around b. Market Monitoring and En- c. Enforcement, Examinations,
to ameliorate the potential devas- gagement with Market Partici- and Investigations
tating effects of the pandemic. pants
As is expected, the Commission
Covid-19 impact on Se- The advent of Covid-19 has in- is actively monitoring markets for
tensified SECZ market monitoring all possible financial crimes, fraud-
curities and Exchange and engagement through greater ulent activities, illicit schemes and
Commission of Zimba- communication with market play- other misconduct affecting inves-
bwe’s business ers. The Commission Staff have tors during this time of Covid-19.

The Commission requires a healthy expanded their routine outreach Enforcement has dedicated signif-
and motivated staff to execute its efforts with all reporting entities icant resources to quickly respond
regulatory role during this period monitoring their day-to-day activ- to all matters. The Commission
of a global challenge and in this re- ities. Key areas of ongoing focus continues to encourage market
gard, the Commission implement- and monitoring include Trading, players to file and serve complaints
ed the following initiatives as result AML/CFT, Markets and Securi- documents electronically. SECZ
of Covid-19. ties Infrastructure. This involves has moved to conducting examina-
monitoring and direct communica- tions off-site through use of var-
a. Transition to remote working tions with players regarding market ious methods including different
and Continuity of Operations conditions, operational challeng- data gathering tools like Question-

The Commission has remained es, and other issues. Further, due naires; unless it is absolutely neces-

22 Investment Quarterly | Q1 Edition 2021

sary, onsite visits are made.
SECZ has remained actively en-
gaged and committed to its mis-
sion to protect investors; maintain
fair, orderly, and efficient markets
and facilitate capital formation.
While the Commission is engaging
on numerous Covid-19 initiatives,
it is also continuing on regular
operations. For example, SECZ
continued to advance rulemaking
initiatives, conduct risk-based in-
spections, and bring enforcement
actions.

Covid-19 impact on Cap-
ital Market
The COVID -19 pandemic is a
profound health and humanitari-
an crisis that massively challenges
the financial and operational resil-
ience of the capital markets. These
have continued to function at the
pace of the economy in general ,
although it has felt the shock of
lockdown during first months of
the pandemic. The move to elec-
tronic trading floors, remote trad-
ing operations has kept markets
orderly and liquid. The Covid-19
induced lockdowns have affected
many businesses but the SECZ
witnessed a shift towards capital
markets as more investments were
channelled in the sector as a way of
preservation of capital. Players in
the capital market are leveraging on
new technologies including applied
analytics, artificial intelligence, and
distributed ledger technology in
very different ways to drive effi-
ciencies in this challenging times.

This article was written by the Secu-
rities and Exchange Commission of
Zimbabwe. For more information,
please contact: [email protected]

Q1 Edition 2021 | Investment Quarterly 23

Market bubble
or rising investor
optimism?

‘‘Stand ready, the good economy was doing well with gross
Itimes are coming!’’ domestic product (GDP) growth
having attained impressive num-
s this what the stock mar- bers. The economy grew by 12%
ket performance is tell- in 2009, 20% in 2010, 15% in 2011
ing us in 2021? Equities and 17% in 2012. Growth slowed
surged from the first week down to 2% in 2013 as the inclu-
of January 2021 and they sive government came to an end
have not looked back since. We following another disputed elec-
are in March and the correction tion. That marked the start of the
which was largely expected to freefall. Even the stock market had
follow the bullish streak is yet to its topmost in that year which was
happen. In US dollar terms the also in line with sales volumes and
market is already up a stagger- earnings peaks for most businesses
ing 58%, which is a handsome (most companies still regard 2013
return to the investors. Howev- as their best since year 2000). The
er, the mood in the market has business environment obtaining
swung from excitement and now cannot be compared to the
surprise to fear of what to ex- stability (annual inflation averaged
pect next and how bad the cor- 2% then compared to 400% now)
rection will be. and growth that preceded the 2013
peak stock market performance.
With a market capitalisation
of US$4.5 billion now, the lo-
cal exchange looks way over-
priced. Long term average
market capitalisation has been
US$3 billion to US$3.5 billion.
The recent peak was just un-
der US$5.5 billion which was
Ranga Makwata achieved in 2013. Then, the Figure 1 Stock market as a leading indicator (2021 growth of 5% assumed, market cap at 5 March 2021, rate Z$120 to USD)

24 Investment Quarterly | Q1 Edition 2021

The recent trading trends have before the rest of the economy be- ic change. In our market, liquidity
spooked many players consider- gins to move in a particular direc- flows have tended to be a major
ing that the year started with a two tion. Investors use these pointers market driver. Because there are
months long lockdown measures to inform their investment strate- limited investment options, when-
to slow down Covid-19 infections. gies as they forestall future market ever there is a sudden avalanche of
It is inexplicable for bulls to charge circumstances. The stock market is money which is not coming from
ahead and within a two month pe- good at warning us about poten- meaningful economic activities
riod of lockdown, 6am-6pm cur- tial economic trouble ahead. By (read, printing) stocks go up. The
fews and rising deaths linked to the the same measure, it is also good ZSE is seen as a safe haven where
pandemic. at showing us early signs of light investors can preserve their value
at the end of the tunnel. This is from inflation. When in fear, in-
There are no noticeable signs because stock prices are forward vestors just dump their local cur-
of turnaround in the horizon. looking. Decisions to buy and sell rency on the stock market without
Granted the rains have been good stocks are seldom based on the considering the value of respective
and the harvest is largely expected past or present, but rather based stocks. To an outsider that creates
to be better than last year, if not on the expectations for the future. an illusion of a bull run which can
one of the biggest in recent years. A listed share is priced in largely be misread as rising optimism.
However, that only will not be a on investors’ expectations of the Of the two scenarios (leading indi-
panacea to our economic prob- future. cator or bubble) which one is more
lems given that other areas are not
performing well. Government’s re- If we apply the same argument likely to explain the recent events
engagement plans are in tatters as to the current run on the Zim- on the stock market? It seems like
Western imposed sanctions were, babwe Stock Exchange (ZSE), it the latter.
not only maintained but look likely would seem like the market is tell-
to be expanded amidst a percep- ing us of a turnaround and growth Capital flight - not a good
tion of worsening human rights to come in several months’ time. sign

violations. Also earnings prospects Otherwise, why would rational in- The capital flight from the ZSE
for businesses are downbeat as dis- vestors value the market at US$4.5 in the last 2 years has been unprec-
posable incomes remain low with billion when nothing has changed edented. In 2020 alone, foreign
lockdown restrictions curtailing from the time it was struggling to investors sold ZWL$6.6 billion
spending. breach the US$2 billion market – worth of shares while purchases
hardly twelve months?
Stocks, as leading eco- amounted to ZWL$137 million
nomic indicator (only 2% the value of sales). In
‘All bubbles always burst’ 2019 foreign selling to buying was

Economists would tell you to Of course this argument should nearly 2:1 while years before that
pay less attention to the present not be taken at face value because all the way to 2009 offshore inves-
and focus on the future. This is mispricing and bubbles frequent- tors were net buyers. For instance,
because a stock market is a leading ly occur in stock markets. Stock in 3 years between 2013 and 2015,
economic indicator. Leading eco- prices can surge even without any foreign buying was 5 times more
nomic indicators predict change anticipation of massive econom- than foreign selling; implying mas-

Q1 Edition 2021 | Investment Quarterly 25

Market bubble or rising investor optimism

sive coming in of portfolio flows much to them; priority is getting
into the country. Foreign partic- the shares at any cost. This obvi-
ipation on the ZSE is now down ously creates a bubble which will
to 15% compared to 50% at peak burst one day.
period (2012-2016). Investors are
leaving the ZSE disappointed over Earnings prospects

bad national policies which de- Traditionally investors buy shares
stroyed their value over the years. in anticipation of future earnings.
That cannot be a sign of good If the prospects for high earnings
things to come. are good, investors are willing to

Little institutional sup- pay more today for the shares to
port capture those future profits. There
is nothing to suggest that the cur-
An interesting or rather puz- rent buying frenzy is linked to any
zling thing about the on-going run bullish view on future earnings.
is that there is very little institution- Price earnings ratios are now look-
al participation as well – except for ing ludicrous at more than 50 for
mainly the Public Service Pension some and above 100 for others.
Fund. By institutions I mean pen- Most companies are unlikely to
sion funds, insurance companies earn half the earnings being im-
and other long term investors who plied by their valuation. An aver-
tend to give stability to the market. age market PE of 20 or 10 times
So as the foreigners were running imply forward earning of US$225
away, the shares they sold were million to US$450 million. Surely
largely being bought by some en- ZSE companies have no capacity
tities which are not the traditional to earn that much in a year’s time.
institutional investors. There is a
lot of speculation (regarding their With all market price determinants
identities) pointing to largely gov- looking weak it is difficult to see
ernment contractors who are paid where the good times will come
in local currency which they invest from since the economy still faces
on the ZSE to retain value. It is dif- many headwinds. It appears like we
ficult to gauge their long term in- have a stock market bubble as op-
tentions. What is apparent though, posed to early warnings of an eco-
is that valuations do not matter nomic recovery.

26 Investment Quarterly | Q1 Edition 2021

PLEASE CONTACT US

FOR TRUSTED

FINANCIAL

MARKETS

INTELLIGENCE

Email:
[email protected]
[email protected]
Phone:
+263 787 629 333 / +263 788 738 975
+263 772 768 364 / +263 733 016 576

Q1 Edition 2021 | Investment Quarterly 27

Small caps outpace
blue chips in 1QY21

The year 2021 start- delity Life (+162.2%).
ed strong and has
attracted a lot of
attention as more
and more local
investors are keen to invest
on the Zimbabwe Stock Ex-
change (ZSE). On the other
hand, foreign sell-offs have
dominated the bourse’s turn-
over. Foreign investors who
were stuck on the ZSE be-
cause of hard-currency short- Statistics from the bourse
ages have latched onto the dol- showed that foreign investors have
lar auctions to exit the market been net sellers since 2020. Mar-
and repatriate funds. ket analysts say government poli-
cies such as the suspension of the
Counters with smaller market fungibility of Old Mutual, PPC
capitalisation managed to outper- and SeedCo International stocks
form heavily capitalised counters for a year and also the five-week
in the first quarter of 2021. The halt of the ZSE could have unset-
ZSE Small Cap Index gained by tled investors and orchestrated the
189.54% compared to the blue sell-off. Trading on the bourse was
chips measure, the ZSE Top 10 suspended for a month on 26 June
Index which managed to gain by 2020 to pave way for investigations
66.40% since January. Unifreight into alleged illicit trades that were
is currently leading the year-to- blamed for the routing of the lo-
date gains on the bourse having cal unit against major currencies.
gained by a significant 5 274.9% Market watchers say Zimbabwe
at 999.74c followed by NTS which is now deemed an unattractive in-
has done 782.5% at 242.25c as at vestment destination due to regres-
5 March 2021. Other notable gains sive economic policies, perceived
are in counters Edgars (+219.4%), disrespect of private property
Truworths (+182.9%), GetBucks rights and policy inconsistency. To
Lavender Marisa (+180%), Turnall (+178.5%) Fi- be sure, foreigners started leaving

28 Investment Quarterly | Q1 Edition 2021

Small caps outpace blue chips in 1QY21

when the country began experi- tween January 1 and January 25, searchers at African Financials, the
encing foreign currency shortages 2021 following a 33% spike in ZSE maintained its dominance and
which resulted in delays in inter- market capitalisation for the local led the pack. Its benchmark index
national money transfers before bourse to ZWL$423 billion from jumped another 11.43%, while,
the situation worsened to a total ZWL$317.9 billion recorded De- conversely, Nigeria’s declined
blockade with banks failing com- cember 31,2020. 1.66%.Total market capitalisation
pletely to move funds out of the on the ZSE rose 62.43% to close
country. Things really got worse Total turnover has been hovering at $484.96 billion as at February.
when the government introduced around ZWL$130 million daily on
bond notes and subsequently rein- average in January. This has turned The ZSE has continued to ex-
troduced the Zimbabwe dollar to out to be the biggest financial plore initiatives that promote fi-
replace the multicurrency system. bubble in a month, in nancial literacy and deepen the
Moreover, the lockdown restric- Zimbabwean capital markets, at
tions imposed by the government the same time attracting a relative
as part of efforts to curb the
spread of the coronavirus number of various client classes.
(Covid-19) posed a threat to A new platform, ZSE Direct,
financial markets because specifically designed for the
of the ensuing uncertain- retail investors, aiming to
ty. Risk-averse investors provide them with a more
feared the Covid-19 out- convenient way to manage
break would inflict seri- their portfolio holdings
ous damage on compa- remotely, was launched.
nies in Zimbabwe. ZSE Direct was put in
place to complement al-
The exit of foreigners ready existing platforms
like C-Trade in the market
continued even as regulators to provide various options for
continued working on the Victo- investors.
ria Falls Stock Exchange (VFEX),
the country’s sole foreign curren- the history of the local The establishment of the ZSE
cy-only bourse. There have been stock market. A possible decisive Direct platform, was largely
suggestions the foreigners could factor behind the bullish trend on prompted by a survey carried out
be readying for VFEX, and that the stock market was the availabili- in the first quarter of 2020, which
there will be more counters list- ty of liquidity in the market. showed that there was a marginal
ing. However, foreigners do not number of local individual inves-
see any difference between ZSE All the major performance indica- tors who were active on the stock
and VFEX especially as both are tors on the bourse, the ZSE finan- market and this was due to lack
controlled by the same authorities cials index, consumer discretion- of appreciation of the investment
whose interference caused issues in ary, consumer stables, industrials, process and the perception that
the existing markets. As at 26 Feb- ICT, materials and real estate index only worldly-wise individuals are to
ruary 2021, foreigners have since - were all trading in the positive invest. The online platform makes
sold ZWL$77.2 million worth of territory throughout the month of access to the market very simple
stocks, with buying amounting to January. The benchmark All Share for the amateurs, at the same time
just ZWL$5.4 million. Index closed at 3 521.68 points allowing them to experience and
understand the investment process.
Despite the large numbers of while the top 10 indexes closed at
foreign investors leaving ZSE, 2246.11 points. Top 15 and Small Approximately 20% of the num-
large trade volumes have been ex- Caps closed at 2 624.18 points and ber of trades are being achieved
perienced in the first quarter of 1 2105.24 points respectively. via ZSE Direct platform, as retail
2021. The market gained about traders on the ZSE can easily trade
ZWL$105 billion in value be- In February, after an analysis of on ETFs. The ZSE also recently
about 17 exchanges tracked by re- moved to make the Old Mutual

Q1 Edition 2021 | Investment Quarterly 29

Small caps outpace blue chips in 1QY21 --- --- ------ --- ---
PAYROLL
ZSE Top Ten Exchange Traded
Fund available on ZSE Direct. DEDUCTION
The Old Mutual ZSE Top Ten --- --- ------ --- ---
ETF tracks the ZSE Top 10 Index,
which consists of the largest 10 LOANS
companies, as ranked by investable --- --- ------ --- ---
market capitalisation, listed on the ORDER FINANCING
local equities market. The Top 10 --- --- ------ --- ---
Index has historically accounted MARGIN LENDING
for around 65% and 80% of the --- --- ------ --- ---
entire listed market capitalisation, INVOICE DISCOUNTING
and is naturally highly concentrat- --- --- ------ --- ---
ed, with the two largest compa- EDUCATIONAL LOANS
nies, financial services conglomer- --- --- ------ --- ---
ate CBZ Holdings and beverages
manufacturer Delta Corporation www.fincent.co.zw
,accounting for weights of 29.8% info@fincent.co.zw
and 17.8% respectively. +263 (242) 255 321

The ETF, therefore, makes it
easier for small retail traders to
buy, hold and sell stock in these big
corporations, which otherwise they
would not afford to. The introduc-
tion of online trading platforms
such as ZSE Direct and C-Trade
have opened up significant op-
portunities for retail investors in
the country. This platform offers
investors an opportunity to own
10 underlying stocks through one
investment in the ETF. Previous-
ly, investors who wanted to invest
in the fund could either buy units
in the ETF through any registered
stockbroker or alternatively by de-
livering a basket of stocks in the
exact weights of the fund through
an authorised participant. The
Old Mutual ZSE Top Ten ETF is,
however, yet to be available on the
C-Trade platform.

Overall broadening the options
within the local capital markets
may help boost the economy as
firms get increased opportunity to
raise long-term funds and also in-
crease the number of trades on the
local bourse.

30 Investment Quarterly | Q1 Edition 2021

Will the RBZ be able
to control M3 growth?

Henry Ford, an What is reserve money?
American indus- Reserve money is also called cen-
trialist, once said; tral bank money, base money, and
“It is well enough high-powered money. It refers to
that people of the the currency in circulation plus de-
nation do not understand our posits with the central bank. Whilst
banking and monetary system, currency in circulation consists
for if they did, I believe there of notes and coins with the pub-
would be a revolution before to- lic plus cash in hand with banks,
morrow morning.” Most central and deposits consist of balances
banks oblige depository institu- maintained by banks in the current
tions to hold minimum reserves account of the central bank for
against their liabilities, predom- maintaining the cash reserve ratio
inantly in the form of balances and as working fund for clearing
at the apex bank. These require- adjustments plus deposits from
ments are instrumental in main- foreign central banks, financial and
taining equilibrium between the multilateral institutions. The de-
needs of the economy and what cline in reserve money entails that
banks can provide. The Reserve the country is at the centre of low-
Bank of Zimbabwe (RBZ) of ering inflationary pressures. In this
late has embarked on a drive light, a reduction in government
to publish weekly reserve mon- deposits at the central bank en-
ey updates since June last year. tails an injection of liquidity in the
This is a step in the right direc- banking sector whilst an increase
tion, as far as providing vital of deposits represents withdrawal
information for the business of money from the banks. The sole
fraternity is concerned, to allow explicit target of monetary policy
for informed decision-making, in Zimbabwe is reserve money at
although the Bank needs to put the moment.
the same effort in publishing
other monetary aggregates.
Tavonga Njaya

Q1 Edition 2021 | Investment Quarterly 31

Will the RBZ be able to control M3 growth?

Reserve Money and the excessive expenditures, as well as increased by ZWL$3.32 billion
banking sector in Zimba- an average monthly inflation below (17.6%) to ZWL$21.93 billion
bwe 5%. The RBZ has been on a drive and then fell by ZWL$2.55 bil-
to ensure a conservative mone- lion (11.6%), respectively, within a
The Reserve Bank initially targeted tary targeting framework in order space of a week .
reserve money growth of between to contain money supply growth,
8 and 10% in 2019 to anchor infla- reduce pressure on the exchange In this light, basic mone-
tion expectations and support the rate and stem inflationary pres- tary policy practice according to
mono currency. However, reserve sures in the economy. According Goodhart’s Law asserts that when
money increased by 103% from a to the apex bank the containment a measure like reserve money be-
stock of ZWL$3.3 billion in March of reserve money below the set comes a policy target it becomes
2019 to ZWL$6.4 billion, as at 31 quarterly targets is attributable to an unstable and unreliable policy
August 2019. This increase was the bank’s mopping-up program instrument. In other words relying
largely attributable to the growth through open market operations on reserve money, which is a highly
of credit to government. and fiscal consolidation measures. volatile aggregate, to control mon-
ey supply is a proper way to create
ln the latest monetary policy Another measure includes a some- a menace.
statement the central bank talks what suction system of setting lim-
about how reserve money growth its on mobile money transfers, and Tracking from last year when the
was well within the monetary pol- the outright banning of agents and RBZ started reporting the amount
icy committee’s target of 25% last payments from bulk mobile lines. of reserves periodically, the Bank

year to end at 18.6% after the gov- However, this position is far di- has been keeping a stranglehold
ernment had repented from its vorced from reality. According to on rapid money supply growth for
overdraft the 2020 Monetary Policy State- reasons of establishing macroeco-
binge to
fund ment (MPS) the reserve nomic stability through a steady
its money target was 10 to exchange rate. This is highly in

15% by year-end but contrast to the demands of the eco-
the actual year-end nomic conditions prevailing both
growth rate was locally and globally. In the wake of
86%. And the same a gruesome coronavirus pandemic,
with money supply which necessitated a global lock-
growth which was down, governments have boosted
set at 60% but the spending and relaxed monetary
actual was 425% policies in order to cushion the
and this subse- severe economic impact of lock-
quently meant downs on firms and households.
that inflation at But not in Zimbabwe, the mone-
year-end would tary authorities as well as treasury
miss the 50% have even increased the grip on the
target to end economy with a focus on mythical
at 348%. Also budget surpluses and a misleading
from the latest exchange rate stability. From the
reserve mon- most basic economics, in times of
ey updates crisis governments are expected
for the weeks to stimulate spending through re-
ending 29 duced taxes (less government reve-
January and nue) and an increased government
5 February spending complemented by an ex-
2021 the pansionary monetary policy, all in
m o n e t a r y the interest of firms and house-
ag g regate holds.

32 Investment Quarterly | Q1 Edition 2021

Let us put aside the fundamen-
tal flaws of the concept and take
the Bank on their word that they
can manage reserve money with
certainty to control money sup-
ply. The important question would
be to what extent is that possible
considering that 60% of bank de-
posits are in foreign currency. Also
compounded by the misguided ex-
change rate targeting anchored on
the USD in which the Bank’s sole
mandate has been to ensure stabil-
ity against the USD as opposed to
working towards stability against
the country’s main trading part-
ners (SA, Europe and Asia). In all
of this, reserve money is just but a
red flag as to the turmoil unravel-
ling in the banking sector and two
dangers gravely menace the future
of the Bank. The greater of these
dangers is intense political pressure
on the RBZ, tending to wrench the
Bank away from sound banking
and economic practice. The sec-
ond is excessive decentralisation,
which has produced a serious lack
of cohesion in the banking system.
No doubt that in 2021 there will
be a recurrence with the exchange
rate slipping further and with it
the USD element of money sup-
ply will rise thus fuelling inflation
and striding the economy towards
re-dollarization.

It is hard to escape the conclu-
sion that this assertion, by the
RBZ that this monetary aggregate
targeting will control money sup-
ply and thereby ensuring exchange
rate stability and reduced inflation,
is designed to turn aside criticism
without either meeting them or
making explicit misstatements.

Q1 Edition 2021 | Investment Quarterly 33

Of Fuel prices and
market distortions

Before we get into showing inflation was slowing both
the crux of finan- month on month and year on year.
cial market mat- The same agency also announced
ters, it is prudent that the Food Poverty Line (FPL)
to give a working for one person in February 2021
definition of what an econo- was $3,934.00, an increase of 4.4%
my entails. An economy can be on the January 2021 figure of
summed up as the careful man- $3,767.56. The Total Consumption
agement of available resources Poverty Line (TCPL) for one per-
and this management is the pol- son stood at $5,187.00 in February
itics or activities aimed at im- 2021 also a 4% increase when com-
proving a country’s status. Most pared with the January 2021 figure
importantly, the management of $4,987.35. On 5 February 2021
of the economy is the prop- fuel prices went up to ZWL$105,58
er control of pricing regime to or US$1,27 per litre of Diesel and
avoid market distortions in the ZWL$104,82 or US$1,.26 per litre
market. This article will give an of Blend. The prices were triggered
in-depth look at market trends by the slight changes in the free on
and the implications thereof. board (FOB) price average for the
month. FOB for diesel moved up
Market distortions resultantly by 7% and 11% for petrol while all
breed misleading economic mea- the other parameters remained the
sures and this reflects badly on the same.
country’s profile as an investment
destination. Prices of basic com- Energy remains a serious prob-
modities have surged in the first lem for Zimbabwe, as the country
quarter with the minister of Indus- has no oil or gas resources of its
try and Commerce Sekai Nzenza own and completely depends on
affirming that the price hikes were imports. An ambitious project to
unjustified. In the same week the produce 20% of the country’s liq-
government noted the spiralling uid fuel as ethanol from cane has
of prices of basic commodities, been started in Chipinge as a way
the Zimbabwe National Statistics to conserve petroleum but remains
Agency published the consum- a contentious venture. Fuel prices
Tinashe Majiga er price index for February 2021 have continued to rise and the im-

34 Investment Quarterly | Q1 Edition 2021

pact of the ethanol dilution is only costs in turn impact the prices of
felt on the upward review of fuel a variety of goods and services, as
prices. The pricing of the precious producers pass production costs
fuel liquid is to a greater extent a on to consumers. Increases in
dependent on supplier pricing. fuel prices can depress the sup-
The law of supply and demand ply of other goods because they
regulates gasoline prices, as it does increase production costs. In eco-
nearly all commodities. nomics, high fuel prices can shift
up the supply curve for the goods
The recent fuel price hikes have and services for which fuel is an
been attributed to FOB and with input. High fuel prices also result
the weekly changes in the USD/ in shrinking demand for other
ZWL rates it therefore follows that goods due to reduced disposable
prices of goods and services have incomes. The two large oil shocks
to be reviewed constantly too. The of the 1970s in USA were charac-
pricing of fuel in local and foreign terised by low growth, high unem-
currency has also created arbi- ployment, and high inflation also
traging opportunities in the mar- referred to as periods of stagfla-
ket as a result of ensuing distor- tion.
tions. Using the exchange rate of
US$1:ZWL$83.7573 (auction rate) Market trends also have an ef-
and about USD$1: ZWL$110.00 fect on the pricing of basic com-
(parallel rates), it becomes cheaper modities. Significant price increas-
for motorists to buy ZWL priced es have been recorded also in
fuel after exchanging their forex basic commodities, mealie-meal
at the prevailing parallel rate. The and cooking oil due to high im-
arbitraging opportunities are not port costs of raw materials. Slight
only limited to fuel prices but also upward movements in prices of
stretch to basic commodities. At flour, beef, chickens, eggs and milk
the entrance of most big super- were also noted. However, the
markets money changers are al- anticipated bumper harvest offi-
ways within the vicinity. Customers cial forecast at 2.8 million metric
with forex at hand in most cases tonnes, is expected to significantly
will not spend it in the shop where cut the country’s grain import bill.
the official exchange rate prevails Food imports increased by 204%,
but rather convert the forex into from US$194.3 million in 2019 to
local currency at the highest rate US$591.6 million in 2020 and these
they can get. were largely maize, wheat and rice
imports. Maize imports sharply
Fuel prices indirectly affect costs rose from US$26.7 million in 2019
such as transportation and manu- to US$297.8 million in 2020.
facturing and the increase in these

Q1 Edition 2021 | Investment Quarterly 35

Where to my beloved
Zimbabwe in 2021

One of the popular tion is more than 25% and more
habits, not bad so when it becomes unpredictable
but whose use- as in the case of Zimbabwe. As
fulness is ques- Charles Koch once said: “The fu-
tionable, is the ture is unknown and unknowable.
formulation and writing down You just keep pushing.”
of New Year resolutions. This
idea came in vogue at a time Before writing down any resolu-
when motivational speaking be- tions and predictions for 2021, as
came a fully-fledged industry, we look into the future, which inci-
and the corporate sector started dentally, may not be there, we ask a
coming up, again at the behest couple of philosophical questions;

of some external consultants, • What do we know, we know?
with mission, vision, and value
statements. Experience is the • What do we know that we don’t
best teacher and having lost know?

money in collapsed banks that • What don’t we know we don’t
had “integrity” and “transpar- know? (unknown unknowns ac-
ency” as values, we now nev- cording to Donald Rumsfeld)
er invest and/or bank with the
institutions with flowery value On the first question, the answer
statements. depends on who is being asked. At
a political or macro level, what is
The Thinking Man As we have seen in the response to crystal clear is that someone some-
the COVID-19 pandemic, there is a where is struggling to know what
36 Investment Quarterly | Q1 Edition 2021 tendency in Zimbabwe and Africa they want to do next to take the
in general for copying and pasting, country forward. On the political
without any customisation. As a re- front, we know that the opposition
sult, whilst the whole “New Year is being scattered, with MDC Alli-
resolution” thing makes sense in ance in disarray and the erstwhile
the US, Europe, Japan, Morocco, G40 appearing to be seemingly
and other countries with inflation in shambles. The citizenry knows
rates less than 2%, stable exchange that they know that the captain is
rates, and a lot of predictability, it struggling, almost in vain, to keep
ceases to make sense when infla-

the ship steady as largely manmade own, don’t know those things that somebody started a restaurant with
tides get worse. they don’t know. a single grain of rice! Our view is
“just push” or as Biggie Tembo
On the second aspect, we know Still, on the aspect of unknown sang a few years ago; “rega kupon-
that we don’t know what the lead- unknowns, when did leaders start ja faka puresha”.
ership is thinking. I guess even at a resigning because of sexual scan-
household level, we are pretty con- dals in Zimbabwe? Is this the new Finally, Islamic philosopher Ibn
fident that most spouses know that norm? Within a short space of Yami categorised human beings
they don’t know what their spouses time, the VP is gone, because he into classes as:
are thinking. At another level, one made a “phone call” while a church
truth that will hit you in the gut is and corporate leader was disrobed. • One who knows and knows
when someone says I know that I Were these two guys “honey pot- that he knows… his horse of wis-
don’t know where my next meal is ted”? Another influential leader is dom will reach the skies.

going to come from and what it a subject of gender based violence • One who knows, but doesn’t
would be. There are many people in with his estranged partner. What know that he knows… he is fast
that position in Zimbabwe and on happens to these guys’ new year asleep, so you should wake him up!
the other side, there are some with resolutions? Do they write new
the luxury of making new year’s ones? • One who doesn’t know, but
resolutions. That is how great the knows that he doesn’t know… his
economic divide is in Zimbabwe? We are a few weeks before the limping mule will eventually get
end of Q1, and the country had him home.
The third aspect is the one that just come out of a lockdown. So,
poses the greatest danger to the the question is, how many of the • One who doesn’t know and
masses going forward. Many lead- resolutions, outside of the volun- doesn’t know that he doesn’t
ers, starting as low as school head tary and involuntary weight loss know… he will be eternally lost in
boys and girls, pastors, councillors, ones, are still on track? Was it his hopeless oblivion!

to senior leaders such as corpo- worth it, dedicating hours and en- You can place yourself and your
rate CEOs, judges, and head of ergy to coming up with New Year New Year resolutions, in one of
government departments and the resolutions, at the behest of moti- the classes above!!!!
State, through no fault of their vational speakers who tell you that

Q1 Edition 2021 | Investment Quarterly 37

A kite against
the wind

The COVID-19 pan- 1. Show gratitude in the
demic has exposed middle of your storm
the vulnerability of
mankind. Mental Gratitude is the vaccine for anx-
disorders, stress, iety, stress and past traumatic dis-
anxiety, poverty, domestic vio- orders. It is not happy people who
lence, divorce, hunger and loss are thankful; it is thankful people
of loved ones, are some of the who are happy. The miracle of
harsh impacts we are faced with. gratitude is that it shifts your per-
ception to such an extent that it
Yet, in the face of great importuni- changes the world you see. Grate-
ties lies some of life’s greatest op- ful people do not have everything
portunities. they love, but they love everything
they have. Gratitude unshackles
“Every cloud”, they say “has a you from toxic emotions like anxi-
silver lining”. We should focus on ety and stress which could increase
the silver lining and not on the your vulnerability to COVID-19
darkness of the cloud. James 1:2- by causing underlying diseases like
4 says, “My brethren, count it all high blood pressure. Gratitude is
joy when we fall into various trials, about focusing on what is good
knowing that the testing of your in our lives and being thankful for
faith produces patience. But let the things we have. It is pausing to
patience have its perfect, that you notice and appreciating the things
may be perfect and complete, lack- that we often take for granted;
ing nothing.” Life’s challenges and things such as shelter, health, food,
sufferings are unto us like wind is
unto a kite. Our faith attains to new
attitudes against opposing harsh
wind of realities. Kites rise against
and not with the wind. In life what
doesn’t kill you make you stronger.

Pastor Tirangane I have laid down a list of pre-
Tivafukidze scriptions that could help you to
stay strong in the face of tribula-
38 Investment Quarterly | Q1 Edition 2021 tions.

A kite against the wind

clean water, friends, family and es- a heart-ache crushes the spirit.” James 1:2-4 describes life’s troubles
pecially the gift of life. Happiness can bring healing to are “an opportunity for great joy”
the body. Proverbs 17:22 “A merry because times of trial bring endur-
One of the leading scientists on heart does good, like medicine, but ance to our faith. The word test is
gratitude – Robert Emos, defined a broken spirit dries up the bones.” the root of the word testimony. So
gratitude as “an effort affirmation The best antibiotic for stress is no test no testimony; no pain no
of goodness. We affirm that there laughter. Some of the medical ben- gain; and no endurance no enjoy-
are good things in the world, gifts efits of happiness are; reduction ment. 1 Peter 1:6-8 reminds us to
and benefits we have received.” For of stress levels thereby protecting choose joy, even during the most
scriptural reference, 1 Thessalo- your heart by reducing blood pres- difficult trials, for this is eternally
nians 5:18 says, “In everything give sure which could otherwise lead to rewarding.
thanks; for this is the will of God heart diseases. Happiness reduces 3. Exercise your body to
in Christ Jesus for you.” 1 Timothy or kills pain, thereby lengthening stay healthy
6:6 continues to say, “But godliness your life expectancy. Work is very beneficial to the body.
with contentment is great gain.” Ecclesiastes 5:12 “The sleep of a
To the Philippian church which Scientific research attest to the labouring man is sweet, whether he
was facing persecution, Paul writes fact that (generally) happier peo- eats little or much; But the abun-
“Rejoice in the lord always. Again I ple have a strong immune system, dant of rich will not permit him to
will say, rejoice” (Philippians 4:4). leading to great health all round sleep.” This scripture implies that
Gratitude can truly not be over and ability to fight infections or if you put your body to physical
emphasized and should certainly diseases more effectively (Stone
never be down played. et al, 1987, Cohen et al, 2008,
Marsland et al, 2006). It is also
2. Stay happy to stay generally believed that individu-
healthy als who are happier have a better

1 Thessalonians 6:16 says “Be perspective and are able to ac-
joyful always.” Here Paul is en- cept new thoughts easily, which
couraging the persecuted church ultimately leads to a lesser experi-
at Thessalonica to be joyful always ence of pain especially connect-
because he knows that the best ed to chronic conditions such
medication for stress is happiness. as Arthritis (Fredrickson, 2004
The benefits of happiness range Barges, Seale and Oster 2014).
from health to socio-economic.
Some of the benefits are spiritual Other benefits of happiness hard work, you will enjoy sound
in nature. are work related. Happy people
make better (informed) decisions
Proverbs 15:13 says, “A happy and are creative problem solvers. sleep even if you lack food, but
heart makes the face cheerful, but This leads to increased individual a rich man who fills up his stom-
and co-operative produc- ach but lacks physical work will
tivity and better customer not enjoy sound sleep. Rich peo-
service satisfaction hence ple usually have servants to do all
increased individual and the physical demanding work and
company revenue. Our they drive even to pay their next
happiness must not de- door neighbour a visit. Walking a
rive from things going our long distance regularly or digging
way. Be happy even in the your garden is good for health as it
middle of trials and tribu- burns extra fat and reduces the risk
lations. We are designed to of obesity and hearth problems.
last, wired to endure. We
should stand in direct defi- Regular physical activity helps
ance to the devil’s arsenal. build strong bones, increases en-
ergy levels, decrease body fat and

Q1 Edition 2021 | Investment Quarterly 39

A kite against the wind

lowers blood pressure. Work or ex- trading offers a number of adver- out life or death, they can either
ercise leads to good sleep – good tising platforms that you can even build up or tear down, they can lead
sleep helps renew the brain and re- use simultaneously like WhatsApp, to gain or pain, they can bless or
juvenate the body. Exercise reduc- Facebook, Twitter, Instagram just curse. To “Declare” or “Decree” is
es stress and anxiety and improves to mention but a few. To improve to powerfully authoritatively, force-
the feeling of positivity. You stay business efficiency you however, fully, confidently, boldly speak
in good shape which boosts your need to run promotions and reduce things into existence. It could be
confidence and self-esteem. Exer- prices to ensure small profit quick described as a positive confession.
cise like walking relaxes the mind returns to avoid accumulation of To decree is to state (out loud) a
thereby improving your mental goods thereby creating need for fact. To decrees is to issue an au-
health. storage space. thoritative command.

4. Exploit the digital space 5. Exercise the power of Matthew 16:18-19 tells us that
declarations Jesus gave us the keys to the king-
At no other time has it been Job22:28 “And you shall also de- dom of heaven so that whatever
more convenient to move compa- we bind on earth will be bound
nies from physical locations to on- clare a thing, and it will be estab- in heaven and whatever we loose
line platforms. Because businesses lished for you; so light will shine on earth will be loosed in heaven
have been compelled by the global on your ways.” A shut mouth is a when we pray in his name. Decla-
pandemic, it is unsurprisingly that closed destiny. Words are pegs on rations are an expression of faith.
digital entrepreneurship is on the which ideas are hung. They are an Words of declaration are creative,
rise. Companies all over the world expression of the heart. “From the prophetic, predictive and legal-
are either, reducing or giving up abundance of the heart the mouth ly binding. Ecclesiastes 8:4 says
physical premises entirely, thereby speaks.” Mankind is the crown of “Where the word of a king is, there
saving money while keeping cus- God’s creation, created in the im- is power and who may say to him
tomers and workers safe, and still age and likeness of God (Gen1:27) what are you doing?” 1 Peter 2:9
providing the services they did and like God man possess the pow- qualifies us as kings, “But you are
before. Running business online er to speak things into existence. a chosen generation, a royal priest-
increases revenue through faster God spoke and things became Gen hood, a holy nation, His own spe-
and better ways of reaching a wid- 1:3, 6, 9, 14, 20, 21, 26. All verses cial people, that you may proclaim
er clientele. Networking has always begins with the words “God said.” the promises of Him who called
been the best way of working as God used speech to create. Gen you out of darkness into his mar-
it reduces business expenses since 1:3 says, “Then God said let there velous light.” As Royalty we should
rentals and travels are eliminated. be light” and there was light. In speak orders.
Your digital gadget becomes your life you attract what you say, so use
Let your kite fly highoffice.
your tongue wisely.
against the wind.Instead of renting a big shop to Proverbs 18:21 reminds us that
display and advertise your mer- the tongue has power of life and
chandise, you can open your online death. Words are a powerful weap-
shop, advertise on your phone and on that can create or destroy you.
order goods upon demand. Online The words we say can either spell

40 Investment Quarterly | Q1 Edition 2021

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TO ADVERTISE IN
THE NEXT EDITION

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A product of Zfn Q1 Edition 2021 | Investment Quarterly 41

How to find your
hidden creative genius

There is an inter- considerable talent rarely produce
esting story about incredible work before decades of
how Pablo Picasso, practice. Let’s talk about why that
the famous Spanish is thus, and even more importantly,
artist, developed how you can reveal your own cre-
the ability to produce remark- ative genius.
able work in just minutes.

As the story goes, Picasso was
walking though the market one
day when a woman spotted
him. She stopped the artist,
pulled out a piece of paper and
said, “Mr Picasso, I am a fan of
your work. Please, could you do
a little drawing for me?” Picas-
so smiled and quickly drew a
small, but beautiful piece of art
on the paper. Then, he handed
the paper back to her say-
ing, “That will be one mil-
lion dollars.” “But Mr Picasso,”
the woman said, “It only took you How creative genius-
thirty seconds to draw this little es come up with great
masterpiece.” “My good woman,” ideas

Picasso said, “It took me thirty In 2002, Markus Zusak sat down
years to draw that masterpiece to write a book. He began by map-
in thirty seconds.” Lesson learnt? ping out the beginning and the end
Picasso isn’t the only brilliant of the story. Then, he started list-
creative who worked for decades ing out chapter headings, pages of
to master his craft. them. Some made it into the final

Jonathan Mbulay I. Picasso’s journey is typical of many story, many were cut. When Zusak
creative geniuses. Even people of began to write out the story itself,
42 Investment Quarterly | Q1 Edition 2021 he tried narrating it from the per-

How to find your hidden creative genius

done, it had taken Zu- Dreams do not come true just be-
sak three years to write cause you dream them. It’s hard
his novel. He called it The work that makes things hap-
Book Thief. In an interview pen. It’s hard work that creates
after his book was finally change… Ditch the dream and
released, Zusak said, “In be a doer, not a dreamer. Maybe
spective of Death. It didn’t come three years, I must have you know exactly what it is you
out the way he wanted. He re- failed over a thousand dream of being, or maybe you’re
wrote the book, this time through times, but each failure paralyzed because you have no
the main character’s eyes. Again, brought me closer to what idea what your passion is. The
something was off. He tried writ- I needed to write, and for truth is, it doesn’t matter. You
ing it from an outsider’s perspec- that, I’m grateful.” don’t have to know. You just have
tive. Still, not good. He tried pres- The book exploded in popularity. to keep moving forward. You just
ent tense. He tried past tense. It stayed on the New York Times have to keep doing something,
Nothing. best-seller list for over 230 weeks. seizing the next opportunity,
It sold 8 million copies. It was staying open to trying something
translated into 40 languages. A few new. It doesn’t have to fit your
years later, Hollywood beckoned vision of the perfect job or the
and turned The Book Thief into a perfect life. Perfect is boring and
major motion picture. dreams are not real. Just … do.
So you think, “I wish I could trav-
el.” Great! Sell your crappy car,
The text didn’t flow. He revised. The simple secret to buy a ticket, and go.
He changed. He edited. By his having good luck
own estimation, Zusak rewrote Right now. I’m serious.
the first part of the book 150 to We often think that blockbuster You want to be a writer? A writer
200 times. In the end, he went successes are luck. Maybe it’s easier is someone who writes every day,
back to his original choice and to explain success that way - as a so start writing. That’s how creativ-
wrote it from the perspective of chance happening, a fortunate out- ity works. We all have some type of
Death. lier. No doubt, there is always some creative genius inside of us. The
element of luck involved in every
This time - the 200th time - it success story. But Markus Zusak is only way to release it is to work
felt right. When all was said and proof that if you revise your work on it. No single act will uncover

200 times - if you find 200 ways more creative powers than forc-
to reinvent yourself, to get better ing yourself to create consistently.
at your craft - then luck seems to For Markus Zusak that meant writ-
have a way of finding you. ing and re-writing 200 times. For

How do creative ge- you, it might mean singing a song
niuses come up with over and over until it sounds
great ideas? right. Or programming a piece of
software until all the bugs are out,
Creative people work and edit taking portraits of your friends un-
and rewrite and retry and pull out til the lighting is perfect, or caring
their genius through sheer force for the customers you serve until
of will and perseverance. They you know them better than they
earn the chance to be lucky be- know themselves. You can make
cause they keep showing up. In any job a work of art if you put
her Dartmouth Commencement the right energy into it.
Address, Shonda Rimes shares a
strategy that echoes Zusak’s ap- How do creative geniuses
proach… come up with great ideas?

They work hard at it.

Q1 Edition 2021 | Investment Quarterly 43

ZiDmabtaabPwageeEcQo1n2o0m21ic

Inflation February 2021 Month-on-Month Year on Year

Consumer Price Index 3.45% 321.59%
Food Inflation 4.42% 358.96%
Non-Food inflation 2.73% 297.07%

Financial Services Dec-19 Dec-20
Banking sector
60.64 349.59
Total Assets - $bln 12.63 82.41
Total Loans -$ bln 9.75 53.18
Net Capital Base - $bln 34.5 208.9
Total Deposits - $bln 6.41 34.24
Net Profit - $mln 9.0% 13.6%
ROA 33.0% 45.5%
ROE 39.6% 34.6%
CAR 36.6% 39.5%
LDR 1.8% 0.3%
NPL 72.4% 73.1%
Liquidity Ratio
$501.184 bln % of total market cap
Zimbabwe Stock Exchange $161,313,409.00
$1,149,971,049.00 12.3
ZSE Market Capitalisation February 2021 9.3
$60,006,922,373 8
Foreign Investor Inflows ytd $45,647,002,971 7
$38,928,141,000 5.6
Foreign Investor Outflows ytd $34,450,346,852 4.8
$27,602,859,561 4.4
ZSE Top ten by market $23,534,727,140 3.9
capitalisation February 26, 2021 $21,451,956,960 3.8
$18,905,239,732 3.7
Delta $18,512,220,489 62.8
Econet $18,201,268,739
CBZ $307,240,685,817 2020
Innscor
Cassava 2019 $4.7 bln
Hippo Valley $4.9 bln
OK Zimbabwe $4.5 bln
Padenga $4.7 bln
FBCH
Natfoods
Total

International Trade (US$m)

Imports
Exports

44 Investment Quarterly | Q1 Edition 2021

Tax Revenue Q3 2020 Q4 2020

Gross collections $58.81 bln $94.28 bln
Net collections $57 bln $91.51 bln
Target $84.38 bln
$44.83 bln

Tobacco production (2020) Growers Area (ha) Mass sold (kg) US$/kg Average yield (kg/ha) Gross value US$
Year 2.5 5,068 452.3
2020 140,257 35988 182,398,614 2.03 6,132 522.6
2019
165,130 42000 257,547,838

Mineral production YTD July 2020 2019 outturn
Gold (kg) Full year 2020 19,053
Chrome (tonnes) 714,176 28,142
Coal (tonnes) 1,600,723
Nickel (tonnes) 1,442,322 2,566,658
Copper (kg) 8,630
Diamonds (carats) 4,860 16,283
8,731
Regional CPI Data January 2021 5,957,171 560,875
Angola
Botswana 339.00 Regional currencies against the US$ Feb-21 Jan-20 Change%
DRC 104.90 630.95 477.356 +32.18
Malawi 123.73 Angola Kwanza 10.7921 10.4838 +2.94
Mozambique 461.39 Botswana Pula 1,967.00 1665.62 +18.09
Namibia 131.21 770.68 727.704 +5.91
Tanzania 143.13 DRC CDF 74.13 60.8373 +21.85
Zambia 101.53 Malawi MWK 15.0857 14.0399 +7.45
Zimbabwe 300.00 Mozambique MZN 2,308.39 2281.48 +1.18
2608.79 21.7584 14.04 +54.98
Namibia 83.8868 16.8038 +399.21
Tanzania
Zambia
Zimbabwe

Commodities vs (previous) Feb-21 Dec-20 Change%
Precious Metals($/oz) 1,734.6 1,891.1 -8.28
Gold 1,260.2 1,075.0 +17.23
Platinum 7,647.0 8,604.3 -11.13
Palladium +6.85
Silver 26.7 25.0
Base Metals(US$/tonne) +32.28
Aluminium 2665 2014.67 +18.48
Copper 9172.5 7741.5 +7.73
Nickel 17818 16540 +39.37
Tin 27500 19731.96 -5.19
Lead 1915.62 2020.47 -7.01
Zinc 2585 2779.85
Energy +1.26
Brent Crude ($/barrel) 52.37 -
+11.07
Agriculture Commodities Feb-21 51.72
203.3 +11.46
White Maize (Safex) - $/tonne ZWL32000 Jan-20 +5.99
White Maize (GMB) - $/tonne 202.92 183.05 +250.00
Yellow Maize (Safex) - $/tonne 327.12 13000 +17.47
Wheat (safex) - $/tonne 56000 182.05
Wheat (GMB) - $/tonne 518.77 308.62 +4.63
Soya (safex) - $/tonne US$420 16000 Q1 Edition 2021 | Investment Quarterly 45
Soya (GMB)-$/tonne 745 441.60
Seed Maize - $/tonne
712

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Q1 Edition 2021 | Investment Quarterly 47

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