The AXiS LII

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Exporters chase VFEX benefits

Shun ZSE

The EQUITY AXIS

&ŝŶĂŶĐŝĂů /ŶƐŝŐŚƐ Ăƚ LJŽƵƌ ĮŶŐĞƌƟƉƐ

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CONTENTS The AXiS LII 04 Nov 2022

The Cover Economic News & Analysis

dŚĞ ŝŶĐƌĞĂƐŝŶŐ ůŝƋƵŝĚŝƚLJ ŽĨ ĨŽƌĞŝŐŶ ĐƵƌƌĞŶĐLJ 4 Zed Retraces Value On VFEX: The chronicles of a
ŝŶ ŝŵďĂďǁĞ ǁŝůů ĂůƐŽ͕ ŝŶ ƚŚĞ ůŽŶŐ ƌƵŶ͕ LJŝĞůĚ former billionaire
ƉŽƐŝƟǀĞůLJ ĨŽƌ ƚŚĞ ĐŽŵƉĂŶŝĞƐ ŵŝŐƌĂƟŶŐ ƚŽ
s& y͘ dŚĞƌĞĨŽƌĞ͕ ƵŶƟů ƉŽƐƚͲĞůĞĐƟŽŶƐ͕ ǁĞ 5 Tigere REITs
ĨŽƌĞƐĞĞ ŵŽƌĞ ǀĂůƵĞ ŐƌŽǁƚŚ ŽŶ s& y 6 ^ůĂĐŬ ŝŶ ŵĂŝnjĞ ƉƌŽĚƵĐƟŽŶ͗ /Ɛ ŝƚ ĞdžĂĐĞƌďĂƟŶŐ ƉŽǀĞƌƚLJ ůĞǀĞůƐ͍
ĐŽŵƉĂƌĞĚ ƚŽ ^ ǁŚŝĐŚ ŝƐ ƐƵƐĐĞƉƟďůĞ ƚŽ 7 Social Commerce: 'ƌŽǁƚŚ ŽƉƉŽƌƚƵŶŝƚLJ ĨŽƌ ŝŵ ĐŽŵƉĂŶŝĞƐ
ĂŵĂƌĂŶƚŚŝŶĞ ŝŶŇĂƟŽŶ͘ 9 Lula da Silva returns to Brazil’s presidency:

Tigere’s REITs tŚĂƚ ŝƚ ŵĞĂŶƐ ĨŽƌ ŝŵ ĂŶĚ ƚŚĞ ůƵŶŐƐ ŽĨ ƚŚĞ ĞĂƌƚŚ
10 Zimbabwe Revenue Authority: KƉĞŶƐ ƐĞƉĂƌĂƚĞ ĨŽƌĞdž ƚƌĂĚĞ
ŝŵďĂďǁĞ ŚĂƐ Ă ĐŽƵƉůĞ ŽĨ ŽƉƟŽŶƐ ǁŚĞŶ
ĞƐƚĂďůŝƐŚŝŶŐ Ă ĐƵƌƌĞŶĐLJ ďŽĂƌĚ͘ &ŝƌƐƚůLJ͕ Ă ĂĐĐŽƵŶƚ
ĐƵƌƌĞŶĐLJ ďŽĂƌĚ ĐĂŶ ďĞ ĞƐƚĂďůŝƐŚĞĚ ďLJ 10 >ĞŐĂĐLJ ƌĞƐƚŽƌĂƟŽŶ͗ &ĂƌŵĞƌƐ ůŽŽŬ ƚŽ ƌĞƐƚŽƌĞ ŝŵďĂďǁĞ ƚŽ ŝƚƐ ĨŽƌŵĞƌ ŐůŽƌLJ
ĐŽŶǀĞƌƟŶŐ ƚŚĞ ĐĞŶƚƌĂů ďĂŶŬ ŝŶƚŽ Ă ĐƵƌƌĞŶĐLJ
ďŽĂƌĚ Žƌ ĂůƚĞƌŶĂƟǀĞůLJ ďLJ ŵĂŬŝŶŐ ƚŚĞ ĐƵƌƌĞŶͲ Guest Column
ĐLJ ďŽĂƌĚ ƚŚĞ ŝƐƐƵĞƌ ŽĨ Ă ƉĂƌĂůůĞů ĐƵƌƌĞŶĐLJ
ĂůŽŶŐƐŝĚĞ ƚŚĞ ĐĞŶƚƌĂů ďĂŶŬ͘ ŽƚŚ ĂƉƉƌŽĂĐŚĞƐ 12 EĂƟŽŶĂů &ŝŶĂŶĐŝĂů /ŶĐůƵƐŝŽŶ ^ƚƌĂƚĞŐLJ Ϯ ͗ DĂŬŝŶŐ ŝƚ ǁŽƌŬ ĨŽƌ Ăůů ĞĐŽŶŽŵŝĐ ĂŐĞŶƚƐ
ŚĂǀĞ ďĞĞŶ ƵƐĞĚ ďLJ ƉĂƐƚ ĐƵƌƌĞŶĐLJ ďŽĂƌĚƐ͘
,ŽǁĞǀĞƌ͕ ŝŶ ƚŚŝƐ ĂƌƟĐůĞ͕ ǁĞ ǁŝůů ŽŶůLJ ĐŽŶƐŝĚĞƌ Economic Research
ĐŽŶǀĞƌƟŶŐ ƚŚĞ ĐĞŶƚƌĂů ďĂŶŬ ŝŶƚŽ Ă ĐƵƌƌĞŶĐLJ
ďŽĂƌĚ͘ >ŽŽŬ ŽƵƚ ĨŽƌ ƉĂƌƚ ƚŚƌĞĞ ŝŶ ŶĞdžƚ ǁĞĞŬ͛Ɛ 14 ƵĐƟŽŶ DĂƌŬĞƚ tĞĞŬůLJ
ŝƐƐƵĞ ŽĨ dŚĞ yŝ^ ĂƐ ǁĞ ĨŽĐƵƐ ŽŶ ƚŚĞ ůĂƩĞƌ͘ 15 Innscor FY22 Results Review
16 NATFOODS FY22 Results Review
Lula da Silva returns to Brazil’s
presidency Business News & Insights

dŽ ƌĞǀĞƌƐĞ ƚŚĞ ĂĐĐĞůĞƌĂƟŽŶ ŽĨ ĚĞĨŽƌĞƐƚĂƟŽŶ 19 Policy fragility: E d&KK ^ ĐĂůůƐ ĨŽƌ ĐŽŶƐƵŵĞƌ Ɛƚ
ƚŚĂƚ ŚĂƐ ƚĂŬĞŶ ƉůĂĐĞ ƵŶĚĞƌ ŽůƐŽŶĂƌŽ͕ >ƵůĂ 20 Innscor’s robust performance despite monetary
ŚĂƐ ƉƌŽŵŝƐĞĚ ƚŽ ƉƌŽƉŽƐĞ ĐŽŵƉĂƌĂďůĞ
ĐůŝŵĂƚĞ ĞīŽƌƚƐ͘ ĐĐŽƌĚŝŶŐ ƚŽ ŽŶĞ ĞŶǀŝƌŽŶͲ loss ƐŚŽŽƟŶŐ ŽǀĞƌ Ϯϯ ϬϬϬй
ŵĞŶƚĂů ƌĞƐĞĂƌĐŚ͕ ŽůƐŽŶĂƌŽΖƐ ĚĞĨĞĂƚ ŵĂLJ 22 & /^ ĚĞĮĞƐ ŚĞĂĚǁŝŶĚƐ ƚŽ ƉŽƐƚ ƐƚĞůůĂƌ ,z ƉĞƌĨŽƌŵĂŶĐĞ
ƉŽƚĞŶƟĂůůLJ ƌĞĚƵĐĞ ŵĂnjŽŶ ĚĞĨŽƌĞƐƚĂƟŽŶ ďLJ
ϴϵ ƉĞƌĐĞŶƚ͘ DĂƌŬĞƚƐ

Innscor’s robust performance 25 DĂƌŬĞƚƐ tĂƚĐŚ
despite monetary 26 tĞĞŬůLJ ŽŵŵŽĚŝƟĞƐ WƵůƐĞ
loss 27 ^ tĞĞŬůLJ
28 &ŝŶĂŶĐŝĂů DĂƌŬĞƚƐ ƚ Ă 'ůĂŶĐĞ
dŚĞ ŐƌŽƵƉ ƌĞĐŽƌĚĞĚ ŐƌŽǁƚŚ ĂĐƌŽƐƐ Ăůů ŬĞLJ
ĐĂƚĞŐŽƌŝĞƐ ǁŚŝůĞ ƌĞǀĞŶƵĞ͕ ŽƉĞƌĂƟŶŐ ƉƌŽĮƚ tŽƌůĚ EĞǁƐ
ĂŶĚ ƉƌŽĮƚ ĂŌĞƌ ƚĂdž ƐŽĂƌĞĚ ƚŽ ƌĞĐŽƌĚ ŚŝŐŚƐ͘
dŚŝƐ ǁĂƐ ĚĞƐƉŝƚĞ ƐƵīĞƌŝŶŐ Ă ϮϯϰϮϲй 23 Business around the world
ŵŽŶĞƚĂƌLJ ůŽƐƐ ƚŽ tΨϮϯ ďŝůůŝŽŶ ĨƌŽŵ tΨϵϴ 24 WŽůŝƟĐƐ ĂƌŽƵŶĚ ƚŚĞ ǁŽƌůĚ
ŵŝůůŝŽŶ ƌĞĐŽƌĚĞĚ ŝŶ ĨƵůů LJĞĂƌ ϮϬϮϭ͘

ZSE ASI 14,186.15 ZSE TOP 10 8,379.19 DEDIUD AP INDEX 31,152.41 ZSE TOP 15 9,341.54 SDALL CAP INDEX 481,064.68 ZtL INTERBANK 629.8555
14,306.79 8,415.89 31,672.52 9,384.98 499,451.17 629.8708
14,553.86 8,604.58 31,846.11 9,570.01 514,838.31 629.9317
14,645.20 8,632.08 32,269.73 9,612.01 516,026.96 630.9359
14,722.93 8,722.19 32,060.44 9,699.18 525,250.93 632.1556
14,838.12 8,774.22 32,454.26 9,767.50 525,250.93 632.2455
4.60% 4.71% 4.18% 4.56% 9.19% 0.38%



4 The AXiS LII Friday 04 Nov 2022

& Analysis

Zed Retraces Value

On VFEX
Chronicles of a former billionaire

Z inona (Zed) Koudounaris is a Zimbabwe- bourse. It was also now a matter of time before In the same month, monthly inflation closed at
an entrepreneur known mostly for having the authorities reacted. 3.5% which renders the growth in ZSE insignifi-
co-founded Innscor Africa Limited, along As a safeguard, “Zed” transferred Padenga from cant in real terms given the magnitude of losses
with co-founder Michael Fowler. The entrepre- ZSE to Victoria Falls Exchange (VFEX), a recorded in the preceding four months. In Octo-
neur was one of the astounding Zimbabwe US$ US$-denominated subsidiary of the ZSE. Foreign ber, the bourse notched by 2% while monthly
billionaires, with a significant chunk of his currency-generating companies are eligible to list inflation closed at 3.2% which also renders the
wealth attributed to his stakes in the now infa- on the bourse, and Padenga was meeting these ZSE growth immaterial.Given the dominance of
mous Zimbabwe Stock Exchange (ZSE) compa- requirements and opted to list on the stable Padenga on VFEX in performance, the listing of
nies. He held the billionaire title for some time bourse. The bourse is purportedly stable due to Simbisa and Natfoods on the bourse means a mo-
until the bear run from May of 2022 to Sep- its reporting currency, the US$, which is a hard nopoly of the bourse by Zed and his Group. This
tember, a period under which the bourse lost a currency. The currency also aids in financial pro- also means, on the upside, improved liquidity on
staggering 85% of its value in United States jections and long-term decision-making as it is the bourse as investors have over time shown
Dollar terms. not susceptible to inflation as is the ZSE. their insatiable appetite for the associate compa-
Together with his friend Michael Fowler, Zed From the beginning of 2022 until the third quar- nies. However, the question will be “Will Axia
founded Innscor Africa Limited in 1997. Over ter of the year, Padenga was the best-performing follow suit to list on VFEX where its peers are
the years, a chicken and chips shop has devel- counter on VFEX, boasting a year-to-date return migrating to?”
oped into a diverse firm with over $600 million of over 70% in US$ terms. The answer lies in the requirements for a listing
in yearly revenue that has spun off additional This was at a time the ZSE had lost 85% of its on VFEX: “Does the company have enough
businesses and listed them separately. Due to value in US$ terms due to reduced liquidity and foreign receipts to be eligible to list”. Axia is
his access to connections in the government and confidence amid runaway inflation which reached still mainly depending on the local market for its
his ability to handle the Competition Commis- an annual high of 285% in August. Reputable revenue, and although efforts to strengthen the
sion's concerns, Koudounaris is at the centre of ZSE millionaires and billionaires made headlines foreign revenues are gaining momentum, the
the company's expansion effort. Army barracks for having lost more than half of their wealth numbers are still too low for a listing on VFEX.
are alleged to receive corn and rice from Inns- which was piled on ZSE or in Zimbabwe-based Zed will, therefore, have to rely on Padenga,
cor's National Foods. The Panama Papers companies. Strive Masiyiwa, the richest man in Simbisa and Natfoods for value recovery and
revealed in 2016 that Koudounaris and Fowler Zimbabwe, was reported to have lost over a preservation given a successful listing on VFEX.
had established four businesses in the British billion from his net worth, from US$2.6 billion The general movement of companies from ZSE
Virgin Islands and transferred funds using their to US$1.3 billion. to Vfex is motivated by the direct benefits accru-
wages in violation of the local forex laws. The ing to VFEX listed companies which are not
two never faced any charges. enjoyed by exporting companies listed on the
ZSE. These benefits are on taxation and export
The Innscor Group has, over the years, grown Zed was not spared in the spiral as he plummet- incentives. If exporting companies move from
into an empire which is undoubtedly running a ed from US$1.4 billion to roughly half a billion. the ZSE their real earnings will be boosted
significant chunk of Zimbabwe’s resources. The In the bear run which spun from May to Septem- through reduced taxes and higher retention on
Group boasts of a number of spin-offs which ber of 2022, Zed's stake in Axia’s market value export receipts beyond certain set thresholds.
have also gotten separate listings initially on reportedly plunged by ZWL17.2 billion (US$53.4 However companies have to deal with the payoff
ZSE. A number of listed companies which million), according to data compiled by Billion- of forgoing higher trading volumes and liquidity
include Axia, Innscor, National Foods, Padenga aires Africa. Currently, Zed owns 113 982 912 on the ZSE , a core tenet of an effective stock
and Simbisa all fall under the partial ownership common shares of Axia Corp. Investments in the market. Companies migrating to the VFEX are
of Zed and thus operate as associate companies. other highlighted companies also recorded mas- cognizant of the fact that the VFEX has no
In 2020, the ZSE recorded an exorbitant growth sive declines which saw the seasoned investor liquidity and therefore over a longer term share
of over 1000% in nominal terms and over losing his billionaire title. prices may plunge and become undervalued
400% in US$ terms, followed by an over 100% As a response to these developments, Zed took against fundamentals. This is a gross disadvan-
growth in 2021 in US$ terms. During this era, advantage of the diversification and scale in his tage to minority shareholders. These payoffs
the aforementioned companies were part of the companies to propose a listing of the companies clearly show that companies are prioritizing real
huge growth on the ZSE which saw the Zeds on VFEX and delist from the inflation-hit ZSE. earnings growth to share price or enterprise value
and Fowlers of this country strengthening their The scale and diversification of the companies appreciation driven by direct demand stemming
“empires”. include operations in foreign countries which from direct trading on the market.
During this period, inflation was skyrocketing, ensures the generation of foreign currency at a
although at a slower pace compared to the larger scale, thereby rendering the companies
movement in stocks. However, due to the eligible to list on the US$-denominated bourse,
efforts that were being exerted by the Central VFEX. Following the bear-run on ZSE which has
Bank, it was a matter of time before the mone- sparked debates on whether the bourse will
tary policy, which was the main driver of infla- recover in the interim given the presidential elec-
tion, was reviewed. The dire consequences of tions scheduled for next year which will also tag
the review would stretch as far as affecting along in dragging the market due to speculation,
company performance in the country as overall Simbisa announced its plans to immediately delist
demand would be caught up in the ripple effect. from ZSE for a listing on VFEX. The announce-
ment was made in October.

Investors, on the other hand, were running out A few weeks later on the 31st of October, the "We invest in the market, winter in the Alps,
of options to preserve value in highly liquid associate company, Natfoods also issued a state- Summer in the Caribbean, and vote for the ED.
nvestments as inflation was soaring by the day. ment on its plans to delist from ZSE for a subse- That's the formula in a nutshell"
The ZSE had remained the best and only viable quent listing on VFEX. The bear run on ZSE
option for value preservation so much that arbi- was halted in September when the bourse record-
trage was now gaining momentum on the ed a nominal gain of 7.8%.

5 The AXiS LII Friday 04 Nov 2022

Capital market

alternatives

Unpacking Tigere’s Real Estate Investment Trust

In an economic climate where expectations of diversified tenant mix of quality tenants and • The REIT is offering the public a 35.5 %
returns on stocks and bonds as well as the active asset management. stake in the 719,323,000 total shares.
diversification potential between various asset • 719,323,000 at ZWL 28.00 per unit will trans-
classes are being challenged by high inflation Undermined by weak macroeconomic fundamen- late to ZWL 2,0141,044,000 and the equivalent
and tightening monetary policy, investors are tals like inflation, efforts to develop a debt capi- of US$ 25,176,305
becoming increasingly interested in alternative tal market have not yielded the desired results. • The minimum number of units is 5000 units
investments to further diversify portfolios. REITs could be a game-changer not just for the and at ZWL28, that will cost you approximately
This month, a long-anticipated, internationally ZSE but also for the broader economy. To inves- ZWL140,000. At a rate of ZWL 800 per green-
ubiquitous investment security, will grace the tors, the potential benefits are compelling which back that is equivalent to US$175.
ZSE, virtually adding some diversity to Zimba- include diversification through the addition of • The REIT is tax-free and only the unit holders
bwe’s fragile investment landscape. Tigere Prop- securities linked to and that track the value of are to be taxed based on their respective brack-
erty Fund’s Real Estate Investment Trust (REIT) hard assets. Investors in REITs can expect regu- ets, it should be 20% WHT.
will be one of only six other countries in Africa lar income from their securities as this income • According to Tigere’s Abridged Prospectus, the
with this security or asset class as part of their flow is guaranteed to them by the law that clas- REIT will target a 5%-7% Net USD income
respective markets. The Tigere REIT is a duly sifies REITs as such. Yield on NAV (net asset value), with further
incorporated and licensed Real Estate Investment The Fund is looking to leverage exposure to opportunity for growth through capital apprecia-
Trust (REIT) whose units are to be listed on the high-quality property assets, de-risked and tion.
ZSE on the 23rd of November. pre-tenanted properties and an exciting develop- • The Tigere REITS promises to pay At least
The property sector in Zimbabwe, particularly on ment pipeline to benefit investors. Further, stable 80% (eighty percent) of all distributable income
the ZSE has been in a state of mutability. Over income, tax-efficient and liquid investment and per annum shall be distributed not later than
the last five years, we have seen the delisting an experienced team with strong ESG values are three months after the end of each accounting
of Zimre Property Investments and Dawn Prop- desirable outcomes. period. Further, more frequent interim distribu-
erties Limited. The former was assimilated into In a recent Equity Axis interview, when asked tions may be made such that the total distribu-
its parent company, Zimre Holding Limited, about expansion prospects, Terrace Africa tions in a year shall be at least 80% of the
while the latter also went private, shunning the Founder and MD Brett Abrahamse, said that annual distributable income.
bourse. Consequently, there are only two proper- “Firstly we want to ensure that we are well cov- • The total Initial Estimated Expenses associated
ty companies listed on the ZSE, namely Masho- ered within Zimbabwe. We want to grow a pipe- with the Listing of Tigere REIT on the ZSE are
naland Holdings and First Mutual Properties. line within Harare and the rest of the country, expected to amount to approximately US$770
Both companies have a vested stake in commer- Bulawayo, Mutare, Victoria Falls. Also, you will 902 which relates to professional fees as well as
cial and office real estate and to a certain see in the prospectus that we have the possibili- regulatory, advertising, printing and postage
extent, residential property. ty of a regional play as well. But for now, our charge
Against this background, the introduction of focus is purely on bringing quality commercial
REITs in the country is crucial for the capital property to Zim”. • At conclusion of the Initial Public Offer (IPO),
markets. The Zim capital markets lack the fund- Zimbabwe has a lot of desirable and prime it is envisaged that the entire issued Units of
ing mechanism for the issuance of debt securi- properties which can be monetized successfully 719,323,000 will be listed on the ZSE. The pro-
ties, restricting investors to equities, govern- using a REIT structure. The Tigere REIT owns moter reserves the right to postpone or withdraw
ment-issued debt, direct real estate, and two such properties. The two properties that its Offer for Sale and subsequent listing due to
exchange-traded funds. Even though the stock will be seeded to the Fund are Highland Park any circumstances which may be deemed to be
exchange has been around since 1894, it lacks (Phase 1) and Chinamano Corner, both proper- prejudicial to the promoters’ or investors’ inter-
depth, both in scope and scale. ties located in Harare, Zimbabwe. The Highland ests during the Offer Period. Should this occur,
It is our view that REITs will be crucial on two Park property, with a gross lettable area of all subscriptions received during the offer period
primary levels. As stated already, the Zimbabwe- approximately 6,704 square meters with 221 shall be refunded in full.
an capital markets need depth in terms of scope parking spaces, comprises 27 Retail tenants As always it must be understood that all invest-
as the universe of investible assets is limited to including a fuel station. ments pose some form of risk. Market risk
stocks and government-issued fixed-income secu- While the Chinamano property has a tenant mix affects all investments in the universe of securi-
rities. Secondly, Zimbabwe has a gigantic hous- consisting of 13 shops which include a pharma- ties. REITs can generate low yields depending
ing crisis with over two million citizens without cy, convenience retail, florist and multiple food on the valuation of the underlying assets in the
access to affordable housing. The number could tenants. A Puma fuel station also acts as a key structure compared to the income that the prop-
be much higher. The government estimates that attraction to the site allowing for a steady erties generate. Real estate investment perfor-
the backlog of housing stock of anywhere stream of clientele throughout the day. mance tends not to follow that of stocks or
between 1.5 to 2 million housing units. bonds, making it a great diversification tool. For
The introduction of REITs to the investment Key Financial Highlights investors with liquidity needs, a REIT can be a
landscape should equally address these issues, smart alternative to owning physical real estate.
ensuring that once these investment vehicles are • With the Promoter intending to sell a total of
unlocked, provide the funding needed to develop 255,323,000 REIT units in Tigere Property Fund Why REITs are crucial in Zimbabwe
more housing units to meet the current backlog. at an Offer Price of ZWL 28.00 per unit by way
However, REITs offer a way for investors to of an offer for units to the investing public, the Advisors and investors have long used REITs —
benefit from some of the more stable aspects of Initial Public Offering (IPO) is expected to raise publicly traded companies that finance, own, or
the real estate market, even while its trajectory about ZWL 7,149,044,000. This is equivalent to operate properties that produce income — and
is largely unpredictable. US$ 8,936,305 at a rate of ZWL 800 per green- the real estate sector as a means to seek income
As long as people need a place to conduct busi- back. and dividends, but also as diversification sleeves
ness, whether a retail shop, office, or health care in their portfolios because of their historically
facility, they’ll pay rent. And as long as this low correlation to both equities and bonds.
REIT collects rent payments; it’s required to Alternatives have become an increasingly popu-
share that income with investors lar investment in 2022 when equities, bonds, and
just about every other traditional allocation has
The Tigere REIT will offer a unique opportunity floundered. One of the strongest-performing
to investors by giving them exposure to alternatives this year has been managed futures
high-quality retail property assets in strategic
locations with growing demand across Zimba- *To Page 6
bwe. The Fund will target to achieve a mini-
mum income yield which will be backed by a

6 The AXiS LII Friday 04 Nov 2022

*From Page 5 money goes up significantly. And the yield on environment, if you own a hard asset feels like
cost that you need to build a new project goes a bond, or worse an older office building, then
that invest in the futures market and take long up. I think you're going to see a challenge to value
and short positions on a variety of asset classes. So what you see happen in an environment like because the income is not growing much and
Although some REITs might struggle with a this is you start to see a reduction in new rates have gone up. On the other hand, if you're
slowing economy and higher debt costs, other supply, which is obviously helpful in the in rental housing and you have pricing power or
trusts are likely to experience a minimal or even long-term and these hard assets are beneficial logistics, where we're still seeing increases in
positive impact from changing economic condi- because they don't have much exposure to input rents.
tions, resulting in a stable and growing income costs, and there's going to be a few of them, as So, in short, the surge in rents and property
stream. I said, built. So that argument for investing in values is more significant than the rise in
In an inflationary environment, the cost to build hard assets. interest rates, and this is particularly true for
the labour cost, which is a big component has The challenge, of course, is in a rising rate REITs since most of them own high-quality
gone up and probably the largest input cost of Class A properties and use little debt.

Slack in Maize production

Is it exacerbating poverty levels?
Z imbabwe produces less than its requires in
terms of food. Particularly for maize longed dry spells experienced in most parts of realised have made it difficult for Zimbabwean
which is an input for the staple diet maize the country as well as poor rainfall distribution farmers to adequately survive on the internation-
meal. The Southern African population is depen- across most parts of the country during the peak al market. And this food insecurity has triggered
dant on maize meal and sorghum for nourish- production period of the season. Because Zimba- soaring poverty rates for the past decade. How-
ment. This failure has resulted in the majority bwe uses mostly rain-fed agriculture, its econo- ever, recent yields and the lately realised rainfall
of the population living under poverty and pres- my is highly dependent on weather patterns. The patterns have made hopes for the Zimbabwean
ently an estimated 40% of the population up most affected areas/districts are Chipinge South, poverty outlook.
from 22% a decade ago living in poverty. Chimanimani, Mutara West, and Beitbridge, The upward pressure on grain (including maize)
Zimbabwe requires 2,2 million tonnes of maize among other Southern and South Eastern areas. includes uncertainty around the Russia-Ukraine
for human and livestock consumption, of which In response, the Zimbabwean government lifted war. Both Russia and Ukraine are major players
the USDA estimates that the requirement for its ban on corn imports that had been in place Ukraine alone produces 6% of all food calories
human consumption stands at around 1.8 million since May 2021. Pursuant to the above annual traded in the international market. Russia, mean-
tonnes. Like other African countries, Zimbabwe corn requirements for food security, the shortfall while, is the 10th largest grain producer (5th
regards maize as a staple food; contributing over must be compensated by imports of approxi- largest corn exporter), producing 15 000000 MT.
50% of the country's calories. Considering the mately 642 086MT. Although drawdowns in The conditions in these Eastern European
World’s definition of poverty as “hunger”; a stocks will be carried out to meet national con- nations thus affect the price at which Zimbabwe
deficiency in this commodity directly affects the sumption needs, import requirements are expect- must import maize. As violence and uncertainty
livelihood and poverty levels of Zimbabweans. ed to increase on a yearly basis to compensate increase so does prices for cereal.
Despite having enough arable land to plant and for the shortfall.
harvest adequate maize to feed the Zimbabwean The main concern in achieving food security is Russia’s military has damaged, destroyed or
population, the country has consistently failed to the upward pressure in global maize prices cou- taken control of nearly 16% of Ukraine’s grain
meet its target for over two decades (with the pled with exchange rate weakness associated storage facilities since the latest invasion. That
exception of 1995 and 2021). According to trade with a depreciating Zimbabwean dollar. Also, translates to approximately one in six facilities
economics for Africa approximately 60% of the the recently obtained population growth of 1,5% in Ukraine that serve to store staples that typi-
farming land is underutilised. This comes after annually necessitates the need to stress more on cally would have been exported to feed a signif-
the land reform programme which pushed away food security. icant portion of the world. Given that even
productive economic activists only to have own- Based on the latest available data, FAO analysis minor damages to grain silos compromise crop
ership of land to the indigenous people indicates that a significant number of countries, storage, such storage disruptions will result in
The maize production for the 2021/2022 season particularly low-income food importers, continue food shortages with global implications. Accord-
stood at 1 557 914 MT, a 29% shortfall from to face elevated levels of food prices. With ing to the World Food Programme, 345 million
the intended production level and a 43% global maize(corn) prices increasing, the ability people face acute food insecurity worldwide and
decrease from the 2 717 171 tonnes produced in to meet the 2.2 million tonnes to meet the 50 million people in 45 countries are on the
the 2020/2021 season. Put in perspective, total national consumption requirement is compro- edge of famine.
production declined by 43% yet area usage for mised. The cost is exacerbated by a weakening
production marginally declined by only 2.6%, currency, further increasing the real cost of the
implying a sharp decrease in tonnes per hectare. commodity.
This is consistent considering that Zimbabwe’s Depicted, below is the trend movement on in
average national maize production is significant- the global markets of grain. maize prices in the
ly lower than the 1.8 tons per hectare average regional market for the past 25 years. The
for the rest of Africa.The slack in Zimbabwe’s highly volatile price movements
production is attributable to intermittent and pro-

Russia’s intentional or indiscriminate targeting of
crop storage facilities may understandably consti-
tute a war crime under international law. The
international community has joined in accord to
put pressure on Russia, by imposing a multitude
of sanctions on the sovereign. More recently,
Russia said it would return to the grain export
agreement, allowing the export of Ukrainian
grain via the Black Sea. A word from Moscow
says exports to African nations will be priori-
tized. The UN said, however, that grain had
continued to leave Ukrainian ports despite the
Russian suspension of the deal. But now the
go-ahead is official.

The third world war crisis has left global mar-
kets in many slumps and the impact on Zimba-
bwean survival has been a hefty one since the
dependency ratio on imports. With the priority
placed on the agricultural sector, the economy is
set to recover and boost the much broader econ-
omy.

7 The AXiS LII Friday 04 Nov 2022

Social Commerce
Growth opportunity for Zim companies

S imilar to other revolutionary and ciutting cally, Shopify or other e-commerce platforms are stores. New to social commerce brands can
edge global innovations, social commerce used to build these websites. Any internet-capable create a test shop inside of Facebook Shops
catalyse growth not only in earnings but device, including a desktop, tablet, or mobile where they can add products, manage orders,
profitability and competetiveness in away that has device, can be used by customers to access these and assess consumer satisfaction.
never been experienced before. local companies websites. Instagram claims that one in two users use the
are slowly awakening to the realities of a digital app to find new companies, goods, or services.
world but less has been done to exploit the enor- Facebook was the most widely utilized social Additionally, 44% of users shop weekly on the
mous potential that the sector offers for both media site for making purchases in 2021, accord- platform. Instagram is a terrific platform for
services and production based entities. This article ing to Statista. Nearly 71% of Facebook users firms to expand their reach and increase their
will will look at how Zim businesses can profit worldwide, according to an eMarketer poll, make sales, whether it's through brand awareness
from the new trend that is sweeping developed at least some of their purchases there. That works campaigns or by offering customers a better
nations like the USA and China. up to 59.4 million customers, many of whom you online purchasing experience.
The value of social commerce might reach rough- can get in touch with by simply starting a Face-
ly $80 billion annually by 2025. By 2025, it is book business. It makes sense for firms wishing Users can purchase items that are featured in
anticipated that the global market for social com- to enter social commerce to start with a Facebook photographs and videos on Instagram. Similar
merce would surpass $2 trillion. Zimbabwean profile. A Facebook shop, an entirely customized to Facebook, business accounts allow users to
businesses should take advantage of this potential online storefront, can be created by any Facebook display their goods through a resizable online
and figure out how to enter this market. Social Business account. Brands can create one from store. Brands can do so by curating product
commerce is distinct from conventional social scratch or upload their existing product catalogue collections. Every product in an Instagram
media marketing tactics, where consumers browse here. Visitors to a brand's Facebook page can Shop catalogue has its page, which includes
a brand's content and then go to its website to browse the products that are offered, along with the item's price, a thorough description, and
begin shopping. Instead, social media websites their sizes, colour options, and specifications. any images or videos that show it.
like Facebook and Instagram serve as online TikTok is a relatively new player, but because
shops for social commerce. This means that Zim- Through Facebook Messenger, prospective cus- of its explosive growth, anyone may believe
babwean businesses need now to provide ade- tomers may ask questions directly to brands. that it has been a social commerce platform
quate funds to their social media budgets to sup- When ready to make a purchase, users can utilize for much longer than it has. Despite Instagram
port social commerce. Facebook Checkout to do so without leaving the having a six-year advantage, the video-sharing
Social media use has led to a rise in social com- app, or businesses can send them to an online app is expected to surpass its 48.2 million US
merce. According to research conducted in Zim- store instead. users by 2025, reaching 48.8 million. Howev-
babwe by Equity Axis analysts, the average The graph above demonstrates that Facebook and er, users of TikTok aren't merely amusing
social media user now spends 15% of their Instagram are the social media platforms that are themselves by swiping through the app.
waking hours on social media, and 10% of adults utilized the most for social commerce, and this is According to TikTok, 39% of users have
in Zimbabwe are addicted to at least one app. the direction that the majority of marketing teams found a brand or product via TikTok that they
Gen Z and millennials are currently the social in organizations should be looking in. Shopping were previously unaware of. Nearly half of
network users who are most likely to have made within social networking platforms, where every- users have bought anything they saw on the
at least one purchase through a social channel, thing from product research to checkout takes app.
according to demographic data. The older genera- place, is referred to as "social commerce," a In 2021, TikTok officially entered the social
tion is less knowledgeable about these business subset of e-commerce. Brands can now sell commerce space when it teamed up with
world growth chances. More social media through their social media networks thanks to Shopify to introduce in-app social shopping.
networks may develop online stores with Buy social commerce. To set up the native selling With a TikTok For Business account, busi-
buttons as social commerce's acceptance and rev- features available on social networking networks, nesses can add shopping tabs to their brand
enue continue to rise. one does not necessarily need to create an e-com- profiles, giving consumers access to a virtual
Social commerce is a straightforward method of merce website. However, online merchants that storefront without having to leave the app.
product promotion and sales. For instance, while do have a website and an online store can profit Pinterest is an image-focused search engine
scrolling through Instagram, you might see a from driving traffic to it as well. and social networking site. Users pin vacation
collection of skin care products. You might tap Social selling and social commerce are occasion- destinations, make mood boards, and, most
Shop Now, add the products to your shopping ally confused. However, social selling is the pro- crucially, find new items. Every month, more
cart, and check out within the app. Currently, cess of establishing connections to later close a than 400 million users use the platform to
Instagram, Pinterest, Facebook, and Tiktok are the deal. Social media platforms are the most look for products and get ideas and interest
four social media apps with native social com- common venue for social selling to occur, wheth- searches are unbranded 97% of the time.
merce features. er it be offline or online. Zim businesses can When merchants upload product listings from
Looking at the so-called “big 5” Zimbabwean seamlessly sync products to Facebook and pro- their online store to Pinterest, they can reach
companies by market capitalisation, Econet Wire- duce shoppable posts and advertisements using potential customers who aren’t aware of its
less Zimbabwe has the most activity on social the Shopify interface. Due to the ease of importa- products just yet.
media platforms like Instagram where the compa- tion, businesses can easily transfer the appearance In conclusion, Zimbabwean businesses that use
ny has 44,6K followers and 4,946K posts show- and feel of their Shopify store to Facebook social commerce would reap several advantag-
ing how the company is using this platform well es. These advantages include expanding your
to tap into the social commerce industry. Other target market, providing a seamless buying
companies however are lagging and looking at experience, learning more about your audience
social media platforms like Pinterest and TikTok and new clients, and getting feedback from
it's mostly startups that are invested in their use customers. While traditional e-commerce is
as opposed to bigger companies. predominantly on an upward growth trajectory,
Social commerce is a no-brainer when it comes we think that social commerce will also be
to getting your brand in front of more people impacted by the change in customer behaviour.
when you realize that 4.59 billion individuals, or Therefore, firms in Zimbabwe must take
57% of the worldwide population, already utilize advantage of this chance.
social media. Zimbabwean businesses should now In general, Zimbabwe's digital advertising
consider original strategies for differentiating their landscape favours social commerce or the sale
brands. The graph below displays the sales that of goods through social media networks. Cus-
have already been made currently being made tomers will be able to interact with their target
and may be made in the future thanks to social audience on social media platforms thanks to
commerce. based on Statistica. Customers can it.
utilize social commerce to find companies, study Customers will be encouraged to finish the
products, communicate with customer service rep- transaction on their preferred app rather than
resentatives, and make purchases. It may be going to your website or online store at the
because social commerce offers a more conve- same time. The inevitable future is this. Since
nient and engaging shopping experience that it is smartphones account for over 54% of all inter-
gaining popularity. By 2026, it is predicted that net traffic, it is also quite practical.
social commerce would be worth $2.9 trillion
globally.E-commerce is not the same as social
commerce. Ecommerce is the act of making pur-
chases through a website or branded app. Typi

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National Financial Inclusion Strategy 2

: Making it work for all economic agents
By Zvikomboreo Sibanda

I n October 2015, the Reserve Bank of Zim- a granular analysis shows that the benefits are not aging 8%, the
babwe (RBZ) conducted a multi-stakeholder trickling down promptly and fairly to all econom- Treasury intro-
engagement to solicit views of the people ic agents. Rather than implementing policies duced the now
and entities that were going to be affected by the aimed at maximizing consumer and producer unpopular ‘2% tax’
decisions it would make or influence the imple- surplus, the authorities are more concerned about officially known as
mentation of its decisions under the proposed ticking boxes. For instance, just like any other the Intermediated
National Financial Inclusion Strategy (NFIS). This commercial bank, established women and youth Money Transfer
culminated in a national blueprint dubbed NFIS1 banks still require collateral security for loans Tax (IMTT). This
(2016-2020) which was launched by authorities in borrowed. Yet, due to the historically dominant regressive tax is
March 2016. As it had outlived its lifespan, a ideology of patriarchy coupled with high per- increasing market
review of the inclusion journey by responsible ceived corruption in government, weak property transaction costs
authorities began in December 2020. In January rights, and poor economic management causing which force or
2022, the Bank commenced preparations for draft- high unemployment and poverty, the majority of allures economic
ing documents for NFIS2 with FinScope Consum- women and youth cannot afford exorbitant bank agents to build
er & MSME Survey results later released in July charges and collateral security demands. As such, compromising
2022. access to finance remains a daunting challenge, structures in order
The foregoing was critical as it afforded stake- especially for small and informal businesses. to mitigate or
holders opportunities to evaluate the NFIS1. For More so, the shrinking fiscal space and rising cover up for the
a country with a rich history of government public debt have forced the government to devel- high costs. In
policy inconsistencies (failure to fully commit to op tendencies of exploiting companies and house- other words, eco-
long-term national plans), a rigorous review under holds through high electronic transfer taxes. After nomic agents in
an evidenced-based approach was inevitable. This spending unsustainably between 2015 and 2018 as Zimbabwe have
is because the financial sector is a very sensitive evidenced by a combined US$10 billion unac- become victims of
and fragile sector of the economy which is prone counted budget overrun and a budget deficit aver technological
to the “Contagion Effect’ -the spread of a crisis advancement and
from one market or region to another. As such, innovation. From a
the sector requires increased transparency and quantitative analy-
accountability to build trust and market confi- sis point of view,
dence. Apart from the contagion effect, there are Zimbabwe has
advantages a country can enjoy by utilizing the scored big in
benefits attached to increased financial inclusion terms of financial
(FI). For instance, increased FI cultivates a saving inclusion but the
culture and reduces cash economy as it attracts qualitative aspects
more money into the banking ecosystem. Resul- remain wanting.
tantly, money creation will escalate fuelling credit For instance, due
expansion which is key in reducing borrowing to high bank
costs, arresting burgeoning cost-of-living, and charges, bureaucra-
boosting private sector-led growth, employment, cy, toxic politics,
and national output. This column seeks to dissect and uncertain
the existing challenges threatening the success of exchange rate poli-
the NFIS2. cies, many eco-
nomic agents are
N(NaFtiIoSn1a)l Financial Inclusion Strategy 1 minimizing the use
of formal chan-
The chief goals of NFIS1 were to increase the nels. The nation
overall level of access to formal services within also lacks enabling
the country from 69% in 2014 to at least 90% by digital infrastruc-
2020 and increase the proportion of banked adults ture compounded
from 30% in 2014 to at least 60% by 2020. To by high
attain the aforementioned goals, NFIS1 targeted broad-band data
groups such as women, youth, MSMEs, rural costs, low digital
communities, and smallholder farmers, among literacy rate, poor
many others. Based on the 2022 FinScope con- skills support, and
sumer survey results, the formally served (banking low national elec-
and formal non-bank) increased to 83% from 69% tricity coverage.
in 2014 while the financially excluded plummeted
to 12% from 23%. From the MSME front, the (c2ia0l22-2I0n2c6lu)sion StrategyNati2onal(NFFinISan2)-
2022 FinScope survey shows that 40%, 95%, and
60% of MSME business owners are now banked, Amid poor qualitative improvements of financial
formally served, and women-led respectively rela- inclusion (FI) aspects, the authorities have recent-
tive to 14%, 18%, and 57% in the last MSME ly launched NFIS2 envisioned to, “Empower all
survey conducted in 2012. Cognizant of the Zimbabweans towards building, resilient, and sus-
make-up of the economy biased toward MSME tainable livelihoods through access and usage of
and increased informality, the authorities have appropriate, affordable, sustainable, and quality
managed to strengthen microfinance under NFIS1 formal financial services in line with the national
by establishing the Zimbabwe Women’s Microfi- development strategy”. The strategy is anchored
nance Bank and the Empowerment Bank (Youth on wealth creation, equitable income distribution,
Bank). The authorities have also managed to financial system stability, and improved welfare
strengthen credit infrastructure by establishing and poverty reduction. Its four key pillars (and
Credit Registry, Collateral Registry, and Credit enablers) are as follows: Financial Innovation
Guarantee Scheme. To harness the benefits of dig- (conducive macroeconomic environment); Consum-
italization and financial innovation, the NFIS1 er Protection and Financial Capability (legal and
brought the development of Innovation Hubs, regulatory environment); Microfinancing, MSMEs
Mobile Money Interoperability, and a Fintech & Entrepreneurship Development (institutional
Regulatory Sandbox. coordination & political commitment); and Devo-
While the foregoing milestones attained through lution (data availability). The targeted groups
the NFIS1 (2016-2020) are highly commendable, remain the same as in NFIS1.

*To Page 17

I Interactive Tincture

14 The AXiS LII Friday 04 Nov 2022

Research

Auction Market Weekly Review

T here have not been some notable develop- Government has shown a propensity to
ments in the auction market in recent bridled spend largely limiting spend to budget
weeks. The market continues to trade with minimal negative variations. This has
lower relative volumes while the margin of cur- allowed for managed borrowings in the open
rency depreciation which significantly subsided market (TBs) for most of the year. Conse-
over the last few weeks remains strongly quently, the pace of credit growth in the
depressed averaging a meagre 0.4% over the last economy has been much slower thus reducing
5 weeks. The average value of trades over the the pressure on the Zimdollar. However, it is
latest 10 weeks, at US$12.5 million is the important to note that the pace of credit
lowest since June 2020. The average weekly creation through government borrowings has
trades have fallen from an average of US$40 relatively gone up in the second half of the
million a week to about US$10 million a week year compared to the first half of the year
since the second half period of the year. These and this points to increasing government
developments have however not been in isola- spend outside of budget. This has the poten-
tion as the alternative market shows signs of tial impact of straining the currency. An anal-
movement in the adverse direction, in the wake ysis by Equity Axis established that outside
of minor stable auction movements. After of local currency credit, USD credit creation
months of stability, the parallel market is now in the market has significantly gone up,
showing signs of pressure with the rate having which has a consequent potential impact of
eased from 1:750 to about 1:810. driving the Zimdollar to another crush.

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To enquire about our services please

Call: 08677 197 791

Email: aaronc[at]equityaxis.net
www.equityaxis.net | Equity Axis

15 The AXiS LII Friday 04 Nov 2022

INNSCOR
FY22 RESULTS REVIEW

o In the 12-months to 30 June 2022, Innscor o Due to high interest rates Innscor reported a to strong performance in the Stockfeeds,
recorded a 49% surge in revenue against prior 75% rise in net interest charge to ZWL7.579 Down-Packed, Traded Goods, Snacks and Bis-
comparative period to ZWL290.78 billion in billion. cuit divisions while in the Stockfeeds division
inflation adjusted terms. OPERATIONS REVIEW AND OUTLOOK volumes grew by 12% owing to firm demand
o A combination of improved capacity utiliza- oInnscor Africa Limited is a manufacturer of across the poultry sector.
tion across the Group’s business units, introduc- consumer staple and durable goods for the mass o Due to the commissioning of increased pro-
tion of new products, expanded product offerings market through a managed and, integrated port- duction capacity during the year under review,
across existing categories, optimal pricing strate- folio of businesses. Innscor’s Snacks division reported a 24% surge
gies and growing demand from the informal o The Group’s Mill-Bake segment, which houses in volumes as further production capacity
market buttressed an overall strong sales vol- the Bakery Division, National Foods and enhancements will continue into the new finan-
umes growth and consequently, revenue growth. non-controlling interest in Profeeds recorded a cial year.
o Innscor recorded an operating profit of 19% growth in loaf volumes in the period under o In the Biscuit division, volumes were stable
ZWL87.833 billion in the year under review, review. The Group said a US$25 million invest- YOY, with demand being impacted by higher
which is a 251% growth comparative to prior ment is underway for a new world-class, fully flour pricing in the latter part of the period
corresponding financial period. automated manufacturing facility in Bulawayo, under review. The Group also alluded that
o The growth in operating profit was attributed and this site is expected to be operational before investment into a new, state-of-the-art biscuit
to improved sales volumes and product mix, the end of the 2022. line has been approved, and this will provide
along with a well-priced strategic raw material o At National Foods, volumes rose by 13% due considerable production capacity increases, a
significant improvement in product quality and

*To Page 16













22 The AXiS LII Friday 04 Nov 2022

Africa Distillers Limited

'HȴHV KHDGZLQGV WR SRVW VWHOODU +< SHUIRUPDQFH

The graph below shows Afdis’ revenue As a result, revenue increased by 48% to ZW$373 million and ZW$3.4 billion from
and total assets over 4 years ZW$14.9 billion from ZW$10 billion last year ZW$231 million and ZW$2 billion in 2021.
with operating income more than doubling to To counteract the currency deficit, government
O n the 23rd of November, Property giant ZW$2 billion from ZW$860 million recorded in maintained a tight reserve monetary policy, nar-
Tigere Property Fund will initiate a Real 2021. Operating income increased by 128%. rowing the quarterly reserve money from 7.5%
Estate Investment Trust (REIT) to Revenue growth was underpinned by higher to 5% while interest rates were spiked by 120
Zimbabwe Stock Exchange (ZSE)- listed group, volume, favourable mix and replacement basis points to 200%, which is a global record
Africa Distillers Limited has recorded growth cost-based pricing while operating profit high. The fiscal policies were passed to curtail
across all its operating units with the profit after increased due to cost management and improved speculative borrowing and arbitrage opportunities
tax more than tripling during the half-year margins. on the black market.
ended 30 September 2022 despite operating in a The Group re-launched its revamped Gold Blend Although they were successful in meeting their
turbulent economic environment. Black Whisky last month and also started pack- mandates, they were also a double-edged sword
The Group which focuses on manufacturing and aging a number of brands that it used to import. as they made borrowing more expensive for
distributing wines, spirits and ciders with over Ultimately, profit for the year more than doubled productive sectors while tight ZW$ liquidity
six depots across the country revealed that vol- to ZW$584 million from ZW$175 million affected the customer purchasing behaviour.
umes increased by 11% in a period which was recorded in 2021. This resulted in the Group’s interest expenses
characterised by inflationary pressures, high soaring by 920% to ZW$121 million from
interest rates and supply chain disruptions. The graph below shows the Group’s ZW$19 million.
Wine volumes grew by 24% driven by financial performance in 2022 “The trading environment for the period under
improved availability and affordability of some review was challenging, characterised by rising
brands which the Group now package locally However, the growth came despite setbacks inflation, high interest rates and supply chain
while Spirit and Ready to Drink (“RTD”) vol- from punitive taxation, high interests and supply disruptions,” the Group’s Mathlogonolo Valela
umes grew by 9% and 11% respectively driven disruptions. During the period to 30 September said in a statement accompanying the half-year
by renewed focus on direct sales distribution. 2022, month-on-month-inflation hit its worst financials.
performance in June at 30.7% while “The government introduced initiatives to reduce
The graph below shows Afdis volumes year-on-year inflation reached a peak of 285% ZW$ liquidity and stabilise the exchange rate in
performance in % in August before decelerating marginally to the last quarter and the reduction in ZW$
280.4% in September, which was one of the liquidity resulted in the softening of demand for
worst inflation performance since 2022. goods and services in supermarkets whilst
This affected the Zimbabwe dollar stability, reg- increasing US dollar transactions in general
istering a record fall of over 77% on the auction trade.”
market against the greenback while deficits dou- Going forward, the Group expects the operating
bled on the black market. As a result, the environment to remain tough due to the scarcity
Group’s monetary loss widened by 177% to of foreign currency and recurring blackouts.
ZW$366 million from ZW$132 million recorded “The operating environment is set to remain
during the prior year. challenging, with uncertainty on power supply
A spike in monetary loss increased the Group’s and inflation.”
administrative expenses and other operating However, Valela said, “There are opportunities
costs which surged by 61% and 59% to for growth anchored on increased economic
activity resulting from mining, agriculture, infra-
structure projects, the forthcoming elections and
relaxed COVID-19 restrictions.”

*From Page 20 year. “Notwithstanding constrained raw material year, with strong performances across all of the
supplies at times, the beef category experienced major product categories.
Triple C and Colcom Foods, recorded an 11% a pleasing recovery with volumes closing 21% Probottlers recorded overall volume growth of
growth in volumes over the comparative year, ahead of the comparative year while the chicken 23% ahead of 2021 buoyed by the carbonated
driven by strong performances in all core fresh category achieved volume growth of 10% soft drink category operating under the “Fizzi”
and processed product categories while Irvine’s against the comparative year which was another brand, following investment into a new dedicat-
recorded volume growth across all three core solid result.” ed 500ml bottling line. While the established
categories. In the table egg category, a 6% cordial category, operating under the “Bally
growth over the comparative year represented AONTHDESRERVLIICGEHST MANUFACTURING House” brand continued to experience favour-
record production within this category. Frozen able volume growth during the period.
poultry demand remained firm, and volumes This reporting segment comprises Natpak, Pro- At Probrands, overall volumes closed marginally
increased by 17% versus the comparative year. dairy, Probottlers and the Group’s non-con- behind the comparative year, although this was
Demand across the day-old chick market also trolling interests in Probrands. Natpak recorded largely a result of the operation placing more
improved, and volumes closed 25% ahead of the pleasing aggregate volume growth of 19% over focus on lower-volume, higher-margin special-
comparative year. the comparative financial year while Prodairy ised categories.
continued its positive growth trajectory, as vol-
At AMP, sustained protein demand combined umes closed 31% ahead of the comparative
with further expansion of the product portfolio-
and improved market reach drove overall
volume growth of 16% over the comparative

Business Around The World The AXiS LII Friday 04 Nov 2022 23

Tanzania Exports First Consignment of Processed Singapore has ambitions to become a global cryp- government. New Prime Minister Rishi Sunak’s
Cashew Nuts to the US tocurrency hub, but has not been friendly toward likely return to a more conventional fiscal poli-
Tanzania has exported its first consignment of cryptocurrencies due to their volatile and specula- cyafter the brief and chaotic tenure of prede-
processed cashew nuts to the United States, as the tive nature, sending mixed signals to the industry. cessor Liz Truss calmed the markets and meant
country seeks to move away from exporting raw Singapore wants to be a hub for digital assets, that monetary and fiscal policy were no longer
nuts to value-added ones. just not for trading and speculating in cryptocur- pulling in opposite directions. -CNBS
The eight-tonne cargo of processed cashew nuts rencies, Ravi Menon, managing director of the Wheat prices jump by nearly 6% after Russia
was dispatched to New Orleans, Louisiana via the Monetary Authority of Singapore, said at the Sin- withdraws from vital Ukrainian export deal
Julius Nyerere International Airport in Dar es gapore Fintech Festival. The most-active wheat contract on the Chicago
Salaam. Board of Trade jumped 5.7% to $8.77 a
Last month, a 20-foot container carrying 7.5 The city-state has shown its approval for block- bushel, after earlier hitting a high of $8.93 a
metric tonnes of branded consumer packaged chain technology and has embarked on various bushel. Global wheat prices rose sharply
cashew nuts also left Mtwara for the US. projects such as Project Ubin and Project Guard- Monday following Russia’s withdrawal from
The exporter is Ward Holdings Tanzania Limited ian which test blockchain applications in financial the Black Sea grain export deal over the week-
(WTH), a subsidiary of Ward Holdings Interna- services. end.
tional, a Michigan-based global market develop- The December wheat contract on the Chicago
ment and investment company. Singapore still wants to be a hub for digital asset, Board of Trade jumped 5.9% to $8.78 a bushel
While flagging off the cargo, the country’s Deputy but not one for speculating on cryptocurrencies, after earlier hitting a high of $8.93 a bushel.
Minister for Agriculture Anthony Mavunde said said Ravi Menon, managing director of central Corn and soybean prices have also risen but to
WTH is supportive of the government’s plan to bank the Monetary of Singapore. a lesser extent with corn futures up 1.2% and
ensure that by 2025, 60% of Tanzania’s cashew soybean futures climbing 1.3%.
nuts are processed locally. “If a crypto hub is about experimenting with pro- The increases come after Russia announced
Currently, the country processes less than 10% of grammable money, applying digital assets for use Saturday that it was suspending its involvement
irtaswc. a-shKewennyuatns,Wwailtlhsttrheeetremainder being exported cases or tokenizing financial assets to increase in the Black Sea Grain Initiative, which
UPeSrcCenetnatgrealPBoianntsk Hikes Interest Rates by 0.75 efficiency and reduce risk in financial transac- allowed vital agricultural products to be export-
The US central bank has approved another sharp tions, yes, we want to be a crypto hub,” said ed from several Ukrainian ports.
rise in interest rates as it wrestles to rein in fast Menon in his opening address at the Singapore Ford reveals third-quarter net loss, weighed
rising prices. Fintech Festival 2022 on Thursday. - AFP down by supply chain problems and Argo A.I.
The Federal Reserve said it was raising its key investment
interest rate by 0.75 percentage points, lifting it to Bank of England raises its benchmark rate by 75 Russia announced it was withdrawing from the
its highest rate since early 2008. basis points, its biggest hike in 33 years deal for an indefinite period after it accused
The bank hopes pushing up borrowing costs will Ukraine of a “massive” drone attack on the
cool the economy and bring down price inflation. • The 75 basis point increase takes the Bank BGluaackrdiSaenaNFigleeertia in Sevastopol in Crimea. –
The latest increase takes the bank’s benchmark Rate to 3%, its eighth consecutive hike to the Poland resorts to coal amid energy crisis
lending rate to 3.75% – 4%, a range that is the main lending rate. Millions of Poles are still reliant on coal for
highest since January 2008. their energy and heating needs, but a steady
The US’s actions come as many other countries • Economists had anticipated the less hawkish decline in the country's production, the embar-
also raise rates in response to their own inflation tone from the central bank after the change in go on Russian imports, and inflation have all
problems, which have been fuelled by a mixture the U.K. government. played their part in a looming energy crisis this
of factors, including higher energy prices as a winter.
result of the war in Ukraine. • A passageway near the Bank of England The southern Silesia region, is the very soul of
Inflation – the rate at which prices rise – hit 8.2% (BOE) in the City of London, U.K., on Thurs- Poland´s coal-mining sector, the largest in the
in the US last month. day, March 18, 2021 European Union, but e ven here the lack of
That is down from June when it rose to 9.1%, the coal doesn’t spare anybody, including former
highest rate since 1981. • A passageway near the Bank of England miners.
The Bank of England is expected to announce its (BOE) in the City of London, U.K., on Thurs- Jacek says retired miners like him used to
mowonve0.s7in5cpeer1c9e8n9ta. g-eKpeoniynat nhiWkeal–lsttrheeetbiggest such day, March 18, 2021. receive 3 tonnes of complimentary coal every
winter, but not anymore.
LONDON — The Bank of England on Thursday " From where can warehouses get coal? And
raised interest rates by 75 basis points, its largest then, if you go yourself to the mine, there are
single hike since 1989, and warned of a pro- 2,000 people ahead of you on the waiting list.
longed recession as policymakers looked to " Says Jacek.
temper market expectations for further aggressive The government has promised help, but prices
monetary policy tightening. have multiplied four times since Spring, and
are still rising. The w ar in Ukraine has
The 75 basis point increase takes the Bank Rate stretched a sector already in decline.
to 3%, its eighth consecutive hike to the main Poland is the EU´s second-largest producer,
lending rate, after the Monetary Policy Committee behind Germany, but coal is considered too
voted 7-2 in favor. One member voted for a 0.5 much of a pollutant and is no longer profitable
percentage point rise while one preferred a 0.25 here, which has led to a steady decline in the
increase. industry. - FT

However, the Bank appeared to challenge the
market’s pricing of future rate rises.

UK pass stiff measures on Russian oil. “The majority of the Committee judges that,
should the economy evolve broadly in line with
The UK government will ban the provision of the latest Monetary Policy Report projections,
insurance for ships carrying Russian oil, the Trea- further increases in Bank Rate may be required
sury confirmed on Thursday, cutting off access to for a sustainable return of inflation to target,
the vital Lloyd's of London market for seaborne albeit to a peak lower than priced into financial
Russian cargoes. markets,” the MPC said, offering uncharacteristi-
cally specific guidance to the market.

The move by the UK is a key step in the G7’s The MPC noted that its updated projections for
attempts to impose a price cap on Russian oil growth and inflation indicate a “very challenging”
exports as the insurance ban would be waived for outlook for the U.K. economy taasrgiett.lo-oBkslootombbreinrgg Scousptsermarkets struggling with producers and
countries that sign up to the scheme. inflation back toward its 2%

Western governments are attempting to limit Mos- UK GDP to nosedive One of Estonia's biggest supermarket chains,
cow’s oil revenues that help fund its war in Selver, has seen prices fluctuate throughout the
Ukraine, but are keen to keep Russian oil flowing UK GDP is projected to decline by around 0.75% year, and seen customer shopping habits change
in the international market as they fear a large over the second half of 2022, reflecting the too.
drop in supply would push prices up sharply and squeeze on real incomes from surging energy and
harm the world economy. tradable goods prices. "There were periods of time when prices were
changing every week in some categories like
The British government said the legislation, which Conditioned on the elevated path of market inter- meat and dairy," said Rivo Veski, Selver's com-
will take effect from December 5, would “prevent est rates, growth is projected to continue to fall munications manager.
countries from using the UK’s services to trans- throughout 2023 and the first half of 2024, as
port Russian oil unless it is purchased at or below “high energy prices and tighter financial condi- "What we see is customers buying more prod-
the oil price cap set by G7 and Australia”. tions weigh on spending,” the Bank said. This ucts that are in campaigns, or not buying such
would be the longest recession since comparable premium products as before but buying items
It added that insurance was “one of the key records began. Unemployment is expected to rise from more basic categories," Veski told Eurone-
services that enable[d] the movement of oil by to 6.5% by 2025. ws.
sea”, especially so-called protection and indemnity
(P&I) insurance, relating to third-party liability. Bank of England Governor Andrew Bailey reiter- Selver, with 74 stores across Estonia, has seen
The UK is the global leader in P&I insurance, ated in a press conference following the a rise in the cost of local food products in par-
writing 60 per cent of global cover. announcement that “the central projections condi- ticular, as manufacturers, in turn, see their own
tional on the market implied path of bank rate prices rising.
The EU is also introducing a ban on services like serve as a reminder that we should not increase
insurance for ships transporting Russian oil, and Bank Rate too far.” This has meant that it has been harder to com-
the US is set to follow suit. “At first glance it pete with foreign supermarket chains who are
appears to be largely in line with what the US is “The MPC judges that the path of the Bank Rate able to import products on a larger scale from
proposing with a ban on services effective Decem- required to return inflation sustainably to target is other EU countries, like Poland.
ber 5fi,”rmsaRideeLd eSigmhithH.an- sBsoBnC, sNanewctsions partner at shallower than that priced into financial markets,”
law he added. Economists had anticipated a less As Selver focuses on local Estonian producers,
hawkish tone from the central bank after the then rising ptorotdhuectciounstomcoesrtss. –arEeuroinNevewitasbly
Singapore wants to be a hub for blockchain in change in the U.K. passed along
finance

24 The AXiS LII Friday 04 Nov 2022 Politics Around The World

North Korea: Pyongyang fires suspected a plan hatched by people lurking in the shadows Guinea Junta orders corruption charges against
ICBM who simply wanted to eliminate a political oppo- ex-president Conde
North Korea has fired an intercontinental ballistic nent,’ said Cissé.– Africanews Guinea's ruling junta is calling for the prosecution
missile (ICBM) but it failed mid-flight, says the Imran Khan: Pakistan ex-prime minister wound- of former President Alpha Conde, whom it over-
South Korean military. ed at protest march threw in a coup in 2021.
The ruling junta is also calling for the prosecution
The ICBM launch, the North's seventh this year, Pakistan's ousted Prime Minister, Imran Khan, has of some over 180 senior officials and former min-
sparked an alert in Japan - but fell short, landing survived a gun attack on his convoy while holding isters for alleged corruption.
in the sea. a protest march in the eastern city of Wazirabad. The military, which took power more than a year
ago, has made the fight against corruption, one of
Tensions are escalating amid fears the North will He was wounded in the leg when a burst of gun- its major proclaimed battles, and many former
soon conduct a nuclear test. fire hit his vehicle. One person was killed and at officials have already been detained in this con-
On Wednesday both Koreas fired missiles near least five others were injured. text.
each other's waters. The exchange saw the most There was no immediate official comment on the But in his public letter sent to the attorneys gener-
number of missiles launched by the North in a motive for the attack which allies say was an al on Thursday, the Minister of Justice took a new
single day. assassination bid. step because he targeted the former head of state
The protest march had been called to demand (2010-2021) by name, as well as a large number
North Korea's multiple launches comes as the US early elections. of his executives when he was in power.
and South Korea are staging their largest-ever Mr Khan, 70, was leading the march, which was Among them are former Prime Minister Ibrahima
joint air drills, which Pyongyang has strongly crit- meant to end in the capital Islamabad. Kassory Fofana and some forty former ministers,
icised as "aggressive and provocative". The former international cricket star turned politi- such as Mohamed Diané in Defense, Mamady
cian was seen being taken to a hospital in Lahore. Camara in Economy, and Mariama Camara in
On Thursday North Korea fired a long-range mis- A party spokesman said he had been hit in the Trade. A number of presidential advisors under
sile at around 07:40 local time (23:40 GMT), shin. the Conde regime are also named. – Africanews
according to a statement from South Korea's Joint He was in a stable condition but an operation was Liberian rebel leader Kunti Kamara sen-
Chiefs of Staff. ICABsMou. rc–e cBoBnfCirmed with the BBC likely, aides said. – BBC tenced to life in prison
that it was an Former Liberian rebel leader Kunti Kamara was
Bulgaria’s parliament approves military aid found guilty by the Paris court of appeal of
Bolsonaro backers call on Brazil military to for Ukraine numerous atrocities including rape and cannibalism
intervene after Lula victory A majority of Bulgaria’s lawmakers on Thursday enacted during the country's civil war 30 years
approved sending the country’s first military aid ago. Kamara was sentenced to life in prison.
Supporters of Brazilian President Jair Bolsonaro to Ukraine. Kunti Kamara, 47, was accused of "complicity in
on Wednesday held rallies to call for an armed The National Assembly voted 175-49 with one massive and systematic torture and inhumane acts"
forces intervention following the election of Luiz abstention in favor of a proposal submitted by against civilians in Liberia's Lofa County in
Inacio Lula da Silva, a move that military experts four pro-European Union parties. 1993-1994 as one of the leaders of the Ulimo
say is out of the question. The government has now one month to decide armed group. He was then less than 20 years old
what kind of weapons Bulgaria can provide with- during the fact.
The country's electoral authority on Sunday said out affecting its own defense capabilities. Prosecutors requested a life sentence while defense
Lula won almost 51% of the vote. Bolsonaro has Bulgaria previously agreed to repair Ukrainian lawyers called for acquittal, citing a lack of
not officially acknowledged the result, though his military equipment at its factories but refused to evidence.
cabinet has initiated a transition, with Lula set to send weapons directly due to opposition from "Your verdict will be historic," prosecutor Aurélie
take over the presidency on Jan. 1. President Rumen Radev and the country’s Mos- Belliot had told the court, which was made up of
cow-friendly political parties. three judges and a jury. "You must send a clear
Bolsonaro's supporters in Sao Paulo and Rio de Along with Hungary, Bulgaria was the only EU message: France must not be the last shelter for
Janeiro led festive rallies on Wednesday, carrying member country that had declined to give Ukraine authors of crimes against humanity."
Brazil's yellow-and-green flag draped over their weapons as it fights Russia’s invasion and war. During the investigation, he acknowledged having
shoulders, blowing horns and chanting anti-Lula “More weapons mean more war,” Bulgarian been a battlefield commander, leading about 80
slogans. Socialist Party leader Kornelia Ninova said, soldiers during the civil war — a choice he said
explaining why her party’s lawmakers voted he made to defend himself against Charles Tay-
"We hope the army will intervene in this situation, against the proposal. – The Associated Press lor's rival faction.
we know that those elections were fraudulent," With no material evidence because of the chaos
said Reinaldo da Silva, 65, a retired government of the war, accusations reliied on witnesses.
worker at a rally at the entrance to a Sao Paulo French police officers went to Liberia to identify
army barracks. witnesses and interview local residents. About 15
of them came to Paris to testify.– Africanews
"I came today because I want Brasil to be free, Biden’s war on ‘disinformation’ ramps up as
socialism does not work with the Brazilian GOP accuses officials of playing politics with
nation." the truth
A handful of President Joe Biden's most important
Similar rallies were held in 24 of Brazil's 26 federal agencies are stepping up efforts to monitor
states, as well as the capital Brasilia, according to and counteract "disinformation" on social media
Brazilian online media portal G1. platforms, even in the face of criticism that the
administration is attempting to silence conservative
In response to a request for comment, Brazil's Israeli PM Lapid congratulates Netanyahu on or opposing viewpoints.
defense ministry said peaceful demonstrations election win The actions by the federal agencies come as Mis-
were part of free expression under Brazilian law, souri and Louisiana are pursuing legal action
adding that "the Defense Ministry is guided by the against Biden, former White House press secretary
Federal Constitution." – Reuters Israel Prime Minister Yair Lapid on Thursday con- Jen Psaki, Dr. Anthony Fauci and other top
gratulated Benjamin Netanyahu on his election administration officials. The two states say these
Senegalese opposition leader claims innocence win as final results confirmed the former pre- officials "pressured and colluded" with Big Tech
in rape case mier's triumphant comeback at the head of a social media companies to censor and suppress
solidly right-wing alliance. information on the Hunter Biden laptop story,
Senegal's main opposition leader and presidential COVID-19 origins and security of voting by mail
candidate, Ousmane Sonko, has claimed his inno- Netanyahu's victory is set to end an unprecedent- during the pandemic.
cence as he made his first court appearance in ed stalemate in Israel after five elections in less Despite the ongoing lawsuit and vocal criticism by
Dakar on Thursday to respond to accusations of than four years. members of Congress, Biden's agencies remain
rape. focused on countering disinformation from foreign
This time Netanyahu, the dominant Israeli politi- adversaries attempting to influence U.S. elections
‘He has, as you can imagine, contested the facts cian of his generation, won a clear parliamentary and on certain topics, including COVID-19
and has dismissed the accusation. He provided all majority, boosted by ultranationalist and religious origins, the deadly Afghanistan withdrawal and
the evidence of his innocence,’ said one of his parties. more.– FOX
lawyers, Bamba Cissé.
Tuesday's ballot saw out the centrist Lapid, and
The 48-year-old politician, who came third in the his rare alliance of conservatives, liberals and
last presidential election and plans to run again in Arab politicians which, over 18 months in power,
2024, has been accused of raping an employee of made diplomatic inroads with Turkey and Lebanon
a beauty salon where he was getting a massage. and kept the economy humming.
Sonko tweeted after the three-hour hearing that he
believed it had gone very well. With the conflict with the Palestinians surging
anew and touching off Jewish-Arab tensions
Cissé described the case as a ‘state conspiracy’, a within Israel, Netanyahu's rightist Likud and kin-
claim made repeatedly by the opposition leader, dred parties took 64 of the Knesset's 120 seats.
and said that it should be dropped.
Netanyahu still has to be officially tasked by the
‘We expect a total dismissal of the case in relation president with fworemekins.g–aRgeouvteerrnsment, a process
to these non-existent facts, that were the source of that could take

The AXiS LII Friday 04 Nov 2022 25

Markets
watch

Will Zimbabwe maintain
the upward trend?
L ocal currency, The Zimbabwe dollar
(ZWL) eased 0.3% on the latest auction South Africa's headline consumer inflation berthing depth of 16.5 meters, and a total invest-
market held on Tuesday ZWL634.2539 slowed for the second month to 7.5% in Sep- ment of $1 billion, is the first deep seaport in
tember from 7.6% in August, but central bank Nigeria and will be able to handle 1.2 million
2539 from ZWL632.1371 traded last week. forecasts show that it will only return to the containers annually, increasing the country’s con-
4.5% mid-point of the target range by the tainer handling capacity by up to 80%.
The highest performance for the ailing currency fourth quarter of 2024. Currently, Nigeria relies on two old, overcrowd-
which is on its course to find stability was found ed ports whose shallow waters are unable to
a forty-night ago after shedding a marginal 0.2% On the stocks market, JSE FTSE All Share dock larger vessels, greatly restricting the scale
against a single greenback. Week to date, the index reversed early gains to close 0.4% down of imports and exports.
local currency has lost by 0.7% against the green- at 67,123, after three straight sessions of gains
back, one of the highest performance in 2022. that sent the index to the highest since RKwanadcha continues climbing against
mid-September.
Zimbabwe dollar’s continued stability is found on The Zambian Kwacha continued on an upward
the back of a tight monetary policy which is Investors cautiously cautiously awaited the US trajectory, closing higher than the South African
keeping the quarterly reserve money target at a Federal Reserve's policy which was hiked by Rand on Thursday after trading at K16.2 against
maximum of 5%, thus, starving the market with 75 basis points to 4%. the United States dollar. However, this was mar-
ZWL liquidity. ginally low from 16.1 traded last week.
Meanwhile, rating agency Moody’s Investors
On the other hand, the global record repo rates Service raised its outlook on Eskom’s debt The Zambian Kwacha is expected to trade at
at 200% has managed to curtail speculative bor- ratings to positive for the first time since 2007 16.43 by the end of this quarter, according to
rowing and minimise arbitrage opportunities on after South African Finance Minister Enoch Trading Economics global macro models and
the parallel market. Godongwana said in the mid-term budget last analysts’ expectations. Historically, the Zambian
week that the government could take over a Kwacha reached an all-time low of 22.65 in July
However, local industrial players are bemoaning substantial portion of the company’s debt. of 2021.
the tight monetary policy as also a drawback Meanwhile, the Stanbic Bank Zambia PMI
effect through making productive borrowing Among single stocks, Clicks Group was the edged up to 50.5 in September of 2022 from 50
expensive and limiting the consumer spending top loser (-4.5%), while miners Impala Platinum in the previous month, signalling a marginal
behaviours. (+4.8%) and Northam Platinum (+3.4%) improvement in operating conditions for Zambi-
advanced firmly an companies. Both output and new orders
RBZ however, said it is in no mood to change returned to growth, as price reductions favoured
its stance on its monetary position so far. That, by the appreciation of the kwacha helped to
however, is subject to evaluations as the nation dNeamiraandpglurnowges continues as dollar stimulate customer demand.
gears towards the 2023 election where govern-
ment is on record interfering with RBZ operations Also, employment increased for the sixth con-
to boost its election campaigns through resorting Naira gained marginally against the U.S. dollars secutive month, amid efforts to keep on top of
to the cranking machine. on Thursday, appreciating 0.04 per cent a day workloads and replace departed staff. Firms also
after it fell at the spot market. But overall, the increased their purchasing activity, in part due to
Meanwhile, the highest rate received for the Zim- currency continued a fall that has been made greater affordability of inputs.
babwe dollar was ZWL670, marginally up from worse by increasing demand for dollars. Meanwhile, suppliers' delivery times continued
ZWL661 recorded last week while the lowest rate to lengthen amid reports of shipping delays.
stood at ZWL610 against the greenback, margin- The currency opened trading at N734.83 per $1 On the price front, a drop in input costs was
ally up from ZWL608 last week. but closed at N736.33 to a dollar as against passed on to customers via lower output prices,
N436. 50 it traded in the previous session on amid improvements in the exchange rate. Finally,
Thursday, data from the FMDQ website, where firms remained confident that output will
Regional Markets forex is officially traded, showed. increase over the coming year.

Rand edges closer to 17.9 The local unit traded between N736.50 and Pula regresses to 13.3
N736.25 to a dollar within the past three
weeks. It reached an eight-month low of The Pula reversed the solid performance encoun-
Rand appreciated slightly to 18.1 against the US N766.50 in September. tered in prior weeks to hit a new low of 13.3
dollar, not far from an over two-week high of against a single greenback, edging closer to a
17.9 hit on October 26th, as the dollar retreated, Meanwhile, Nigeria has been ranked 103 out of historic low of 13.59 recorded on the 1st of
amid expectations that the US central bank could 121 countries by the Global Hunger Index as October 2022.
signal the shift to a less aggressive policy narra- having serious hunger levels. This is the second The Central Bank of Botswana kept its bench-
tive. consecutive year that Nigeria has been ranked mark interest rate steady at 2.65% during its
as having one of the worst hunger problems October 2022 meeting, following a 50bps rate
South African Reserve Bank is expected to raise globally. hike in August. The decision was aimed at con-
rates at the next meeting later in the month. Gov- tinuing to support a nascent economic recovery
ernor Lesetja Kganyago said South Africa still Also, construction work on Lekki Deep Sea against a backdrop of strong inflationary pres-
has space to raise interest rates, citing the need Port, the biggest seaport in Nigeria has been sures and global uncertainties.
to get inflation expectations more anchored completed, a major step toward the country
around the midpoint of its target range of 3%-6%. breaking through a bottleneck in international
trade and achieving accelerated economic
He added that the consequences of the central growth.
bank loosening its grip on inflation and falling
behind global peers as rates are being normalized According to China Harbour Engineering Co,
would be “too costly”. the port’s builder, Lekki Deep Sea Port, with a

The AXiS LII Friday 04 Nov 2022 25

Weekly
Commodity Pulse

Gold (US$/oz) site is close to Impala Platinum's Zimplats importance in everything from automobiles
operations. and skyscrapers to iPhones. The US adminis-
tration is eyeing three options: an outright
Copper (US$/t) ban, increasing tariffs to levels so punitive
they would impose an effective ban or sanc

tioning the company that produces the
nation’s metal, United Co. Rusal International
PJSC, according to people familiar with the
decision-making.

Nickel (US$/t)

There is a global migration underway in the Copper futures rose 3.5% in the week to In the week under review, nickel prices were
gold market, as western investors dump bul- settle at $7,584 per tonne from $7,432 record- down 1.1% as demand for the metal further
lion while Asian buyers take advantage of a ed in the prior week over demand-supply con- plummeted by the largest consumer, China.
tumbling price to snap up cheap jewellery and cern. At large, copper prices have been However, experts anticipate that nickel prices
bars. Moreso, rising rates that make gold less weighed down by China’s property sector will remain sluggish for the foreseeable
attractive as an investment mean that large woes and Covid-19 lockdowns while investors future. After the LME’s (London Metal Ex-
volumes of metal are being drawn out of have turned away from commodities amid change) nickel squeeze and because of the
vaults in financial centres. In the week under tightening central bank policies. Copper has war in Ukraine, global supply continues to
ended 14 October 2022, gold prices marginal- lost all the gains it made this year as inflation drop. Adding to these problems are expecta-
ly fell by 1.6% to ease at $1,1676 per ounce has climbed higher, interest rates have risen, tions that Indonesia’s current nickel surge will
as U.S. bond yields march higher. The U.S. and energy costs keep surging. Covid-19 further affect nickel price direction. Septem-
dollar index remains not far below its recent lockdowns in an already slowing Chinese ber and October are typically high points for
20-year high and that’s also an underlying economy have continued to dampen the annual nickel purchases, but the metal could
bearish element for the metals markets. Trad- demand outlook for the red metal, while the face a rocky road going into Q4.
ers are awaiting key U.S. inflation reports in strong US dollar has weighed heavily on the
the week and the consumer price index is markets this year. LME prices are now down Brent/Oil (US$/b)
expected to come in at up 8.1%, year-on-year, around 30% from their peak in February fol-
following a rise of 8.3% in August. Global lowing Russia’s invasion of Ukraine when the In the week under review, oil prices fell for
stock markets were mixed to firmer overnight. three-month LME copper price reached a second straight session as investors fretted
U.S. stock indexes are pointed to higher open- $10,580 per tonne. The short-term demand about a hit to fuel demand from growing
ings when the New York day session begins. outlook remains weak amid recession fears risks of a global recession and tightening
In other news, Caledonia Mining announced and weakening global manufacturing activity. COVID-19 curbs in China. The International
Q3 2022 production of 21,120 ounces of gold The focus is now shifting to China’s 20th Na- Monetary Fund on Tuesday cut its global
from its Blanket mine in Zimbabwe, a record tional Congress in Beijing, which will start on growth forecast for 2023 and warned of
gold output for any quarter, and an increase 16 October, with markets looking for a possi- increasing risk of a global recession.
of 11% over Q3 2021. The company said that ble change in the country’s zero-Covid policy. In other news, the G7 leaders appeared to
gold produced in the nine months to Septem- There is speculation that the government may sidestep imposing a price cap on Russian oil
ber 30, 2022, was 59,726 ounces, 22% more start to relax its strict approach to containing within weeks to strip Russia of its largest
than the 48,872 ounces produced in the nine the virus. China recently unveiled new mea- source of income to finance its war effort in
months to September 30, 2021. sures aimed at reviving the country’s real Ukraine. The leaders of the world’s leading
estate industry, which could potentially boost western economies have promised a cap
Platinum (US$/oz) the usage of industrial metals, including before, most recently at a meeting of G7
copper. A slowdown in China’s property finance ministers on 2 September, with the
market has weighed on the world’s biggest plan pencilled to come into force on 5 De-
metal consumer for more than a year. Around cember. But the latest G7 statement made
23% of China's copper end-use comes from only the most passing general comment about
civil and building construction. continuing to cooperate to ensure energy
security and affordability across the G7 and
Aluminium (US$/t) beyond. The Ukrainian president, had urged
the meeting to impose a tough price cap call-
Platinum futures price fell 4.5% as supply Aluminium prices on the London Metal Ex- ing for zero profit for the terrorist state.
increased aggressively against constant change (LME) soared by 3% after reporters
demand. The base metal closed trading week stated that the United States was considering
selling at $884 per tonne from $944 recorded a ban on Russian aluminium in response to
in the comparative week. South Africa's the conflict in Ukraine. The Biden administra-
Tharisa plans to spend $391 million (R7.2 tion is considering raising tariffs on Russian
billion) on developing a 194 000 aluminum to levels so punitive they would
ounce-per-year platinum group metal (PGM) effectively ban Russian aluminium producer
mine in Zimbabwe. In other news, Tharisa, a Rusal. Metal products from Russia have so
co-producer of chrome concentrates and PGMs far been shielded from sanctions due to their
in South Africa, owns 70% of Karo Mining
Holdings, developer of the Karo PGM project
on Zimbabwe's Great Dyke, about 100 kilo
metres south-west of the capital Harare. Its

The AXiS LII Friday 04 Nov 2022 27

ZSE WEEKLY COMMENTARY

As investors race to buy at lows, the ZSE opened the month of November in positive
territory, extending the winning streak to a third straight week. The increased demand
comes on the back of a steadily rising investor confidence brought on by the pro-
longed policy stability and a contractionary monetary policy that is positively yield-
ing, as evidenced by the current disinflation.
The mainstream ZSE All Share Index, which closed the week at 15186.72 points,
surged by a tepid 2.35% in the week under review. Market heavyweights and medium
caps, which increased by 1.75% and 3.78% respectively, drove the week's gains, out-
pacing the -0.52% decrease in penny stocks. On the downside, due to a slowdown
in demand towards the end of the week as some investors were taking out profits,
the magnitude of gains in the week under review was marginalized.
Overall year-to-date nominal gains for the ZSE scaled up to 40.33% in the week,
which, however, translates to a loss of -76% in US dollar terms. After rising by 2%
in October, the ZSE has increased by a modest 0.76% since the beginning of
November. Meanwhile, on November 23rd of this year, Tigere Property Fund will
list the first REIT on ZSE, according to their announcement

ZSE ASI 14,838.12 ZSE TOP 10 8,774.22 D /hD W /E y 32,454.26
ZSE TOP 15 14,933.47 8,810.56 32,839.64
15,072.14 8,878.08 33,256.19
15,189.23 8,945.41 33,537.05
15,204.84 8,945.57 33,659.56
15,186.72 8,928.17 33,681.10
2.35% 1.75% 3.78%

9,767.50 ^D >> W /E y 525,250.93 ZtL INTERBANK 632.2455
9,842.26 523,569.99
9,931.66 531,535.21 632.2597
10,000.01 531,535.21
9,995.02 525,904.22 632.7703
9,977.49 522,528.51 633.7681
2.15% -0.52% 634.5367
634.7746
0.40%

On the US$ denominated bourse, VFEX, the duo of Padenga and SeedCo International
plunged by a further -3.6% and -0.1% respectively in the week under review owing
to profit-taking which induced high sell-offs. An aggregate of US$455,687 exchanged
hands on the bourse in the week, significantly up from a total US$61,886 recorded
in the prior week as investors liquidate their portfolios ahead of the festive.

On global markets, Asian shares slipped on Thursday after the U.S. Federal Reserve
shifted the outlook on tightening from short and sharp to long and high, putting to
rest any thought of a near-term pause.

Meanwhile, the US$ appreciated by 0.4% against the ZWL at the close of the most
recent trading week on the Reuters Auction market to close at ZWL634.77 per each
US$. On the sole legal exchange market, the Interbank, the greenback gained 0.3%
against the local unit to close at ZWL634.254 per each US$. As the Central Bank

continues to tighten liquidity in the economy, the premium between the parallel market
and the formal exchange market has fallen from over 100% to below 30%.

FINANCIAL MARKETS AT A GLANCE 2022

ZSE All Share Index ZSE Top 10 Index ZSE Small Cap Index /ŶƚĞƌďĂŶŬ DĂƌŬĞƚ ZĂƚĞ

15,186.72 8,928.17 522,528.51 634.7746
2.35% 1.75% -0.52% -0.4%

ZSE Top 10 Index ZSE Small Cap Index ZSE Dedium Cap Index

ll Share inĚex ZSE ToƉ10 inĚex ll Share inĚex Small CaƉ inĚex ll Share inĚex

DeĚium CaƉ inĚex

8͕928.17 15͕186.72 3153͕͕618861..1720
15͕186.72 522͕528.51

WKW 1.8й DKD 33й YTD 31.1й WKW Ͳ0.5й DKD 11й YTD 29.7й WKW 3.8й DKD 26й YTD 65й

ZSE Financials Sector ZSE Financials inĚex ZSE Consumer DiscreƟonary Index ZSE Consumer Staples Index

ll Share inĚex ll Share inĚex ZSE Consumer DiscreƟonary inĚex ll Share inĚex ZSE Consumers StaƉles inĚex
27282.65

15͕186.72 15͕186.72 15͕186.72
25561.61 17830.25

WKW 4.1й DKD 15й YTD 82.3й WKW 4.4й DKD 94й YTD 122.7й WKW 1.9й DKD 29й YTD 30.4й

ZSE Industrials Index (New) ZSE ICT Index ZSE Daterials Index ZSE Daterials InĚex
13899.21
ll Share inĚex ZSE InĚustrials InĚex (new) ll Share inĚex ZSE ICT InĚex ll Share inĚex 15͕186.72

21242.39 15͕186.72
15͕186.72 17030.63

WKW 2.1й DKD 33й YTD 12.2й WKW 0.1й DKD 10й YTD 3.7й WKW 5.6й DKD 37й YTD 59.1й

ZSE Real Estate Index ZSE Zeal Estate InĚex Interbank Darket 31й JSE All Share Index
14056.59 3.3й
ll Share inĚex 15͕186.72 InterbanŬ ll Share inĚex JSE ll Share inĚex

15͕186.72
66671.63

WKW 1.8й DKD 47й YTD 60.3й WKW Ͳ0.7й DKD 5.1й YTD Ͳ9.6й

BSE All Share Index LUSE All Share Index NGSE All Share Index

BSE ll Share inĚex LhSE ll Share inĚex EGSE ll Share inĚex

15͕186.72 15͕186.72 15͕186.72
7569.24 7233.54
WKW 0.4й DKD 2.5й WKW Ͳ0.002й DKD Ͳ0.3й WKW Ͳ0.8й DKD Ͳ9.7й 44283.02
YTD 8й YTD 19.4й
YTD 3.7й

Latest WƌŝĐe Wrevious WeeŬ Consumer Latest WƌŝĐe Wrevious WeeŬ DĂƚerials Latest WƌŝĐe Wrevious WeeŬ dKW ϱ t <>z Z/^ Z^
ZWL Cents ZWL Cents ZWL Cents ZWL Cents Sector ZWL Cents ZWL Cents
& /^ ĨƌŝĐĂŶ ^ƵŶ KhEd Z WZ/ Ed^ , E' й , E'
Z/^dKE 29795 29800 y/ 2540 2300 Zd Z 1700 1700
d 396.11 399.77 ' Z^ 8290 8023.08 > & Z' 12000 12000 y/ 8290 1191.04 ϭϳй
CFI 317500 317500 Ed^ 760 760 WZKW> ^d/ ^ 2949.58 2949.58 FCB 1060.27 125.27 ϭϯй
>d 41125 41125 Zd' 1200 1200 dhZE >> 391 390 Zd Z 1700 195 ϭϯй
/Z/ KZ 23994.39 23423.96 ^/D /^ 812 788.55 tŝůůĚĂůĞ 285 287 & , 5596.08 596.08 ϭϮй
,/WWK 4950.6 4800 dZhtKZd,^ 24132.61 24000.47 ZŝŽŝŵ 14500 13000 ZŝŽŝŵ 14500 1500 ϭϮй
/EE^ KZ 20700 20700 254 254
D d , 34153.97 32504.18 ICT Financial Latest WƌŝĐe Wrevious WeeŬ dKW ϱ t <>z & >> Z^
D /<> ^ 800 741 Sector Latest WƌŝĐe Wrevious WeeŬ Sector ZWL Cents ZWL Cents
E d&KK ^ 10047.17 10266.67 Ecocash ZWL Cents ZWL Cents KhEd Z WZ/ Ed^ , E' й , E'
K< 110300 110213.48 KE d 4409.82 &ŝƌƐƚ ĂƉŝƚĂů ĂŶŬ 1060.27 934.54
^ K 2995.78 3195.32 /DW W Z^ 4202.56 8641.12 CBZ 13290 13288.46 /DW W Z^ 260 ͲϰϬ Ͳϭϯй
^d Z &Z/ 8205 8205 8851.3 300 & , 5596.08 5000 K< 2995.78 Ͳϭϳϳ͘Ϯϱ Ͳϲй
TSL 185.24 180.09 ZĞĂl Estate 260 FIDELITY 2400 2200 K ^, 4202.56 ͲϮϬϮ͘ϭϴ Ͳϱй
dĂŶŐĂŶĚĂ 4210 4210 Sector Wrevious WeeŬ &D> 2445 2500 &DW 860 ͲϯϬ Ͳϯй
8500 8500 D ^,,K> Latest WƌŝĐe ZWL Cents GBFS 1895 1755 ,> 497.83 ͲϭϮ͘ϭϳ ͲϮй
&DW ZWL Cents 800 ED  2500 2398.04
890  &, 11450 11501.1
800 ,> 497.83 510
860

JSE All Share Index BSE All Share Index LuSE All Share Index NGSE All Share Index

66671.63 7503.46 7233.54 44283.02
-0.67% 0.6% -0.002% -0.77%