Bulls n Bears Investors Notebook Issue 525: 26 June 2020

Fri Jun 26 07:38:42 CAT 2020

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Bulls n Bears Investors Notebook Issue 525: 26 June 2020

 <mailto:info at bulls.co.zw> 

Bulls 'n Bears Investors Diary: Today's Events

Quotable Quote:

Relations are all about: Winning, Losing & Sharing.
Winning Trust, Losing ego

"US$1bln to back forex auction" lead   

Local banks have nearly a billion dollars worth of forex in foreign currency
accounts (FCAs) while the country has healthy inflows to sustain the newly
introduced forex auction system that replaced the interbank with effect from
Tuesday this week. Reserve Bank of Zimbabwe (RBZ) Governor Dr Mangudya said
in an interview that the question that has been on the lips of many an
observer, was fear that the country may not have adequate supply of foreign
currency to feed and sustain the auction system, which must determine the
official exchange rate.  <http://www.bulls.co.zw/> Read more >

Will Zisco work again?   

For the umpteenth time, the Zimbabwe Iron and Steel Company, will soon be on
the market seeking an investor to revive once Africa's largest integrated
steel giant. This probably points to the collapse of the controversial
takeover of Zisco assets by a Mauritius based investment company, ZimCoke,
fronted by businessman and politician Eddie Cross. The government owns 91
percent stake in Zisco. Since mothballed in 2008, and having been
operational since 1942 when the country was still under Britain, Zisco has,
in vain officially negotiated with two investors from India and China whose
offers appeared so attractive and promising. But none of them materialised.
<http://www.bulls.co.zw/> Read more >

 <mailto:info at bulls.co.zw> 

For more business & financial updates log onto <http://www.bulls.co.zw/>
www.bulls.co.zw

Cotton ginners risk defaulting on export contracts   

Cotton ginners run the risk of defaulting on their lint export commitments
as they are failing to buy raw cotton from farmers due to unavailability of
cash. Raw cotton is processed into lint through ginning. It is a process of
separating fibre and seed. Some ginners have had their mobile money platform
closed by the Reserve Bank of Zimbabwe on suspicion that they are being used
to fund foreign exchange black market activities. The central bank's
Financial Intelligence Unit believes large money transfers particularly by
EcoCash agents are being used to fuel black market deals.
<http://www.bulls.co.zw/> Read more >

Currency Auction: CZI says don't print money   

The recently introduced foreign currency auction system offers an
opportunity for the stabilisation of the Zimbabwe dollar but there is need
to develop mutually agreed safeguards to protect the Reserve Bank of
Zimbabwe from fiscal pressure that will result in unsustainable money supply
growth, the Confederation of Zimbabwe Industries has said. High money supply
growth levels, of more than 300 percent between June 2019 and first week of
June 2020, have been blamed for the local currency's weakness as well as the
obtaining hyperinflation which reached 786 percent in May this year. Fears
are that high levels of money supply will derail efforts to stabilise the
exchange rate through the auction system.  <http://www.bulls.co.zw/> Read
more >

Zim gold smuggled to Dubai via SA   

The country's gold is being smuggled to Dubai via South Africa, and
Government is putting in place measures to curb the vice so as to ensure
increased formal deliveries of the precious metal. Finance and Economic
Development Minister, Professor Mthuli Ncube, revealed this on Thursday
while in Matabeleland North province at Bubi Gold Milling Centre. Government
commissioned the gold centre last year as a pilot project run by the
Zimbabwe Mining Development Corporation (ZMDC) as it moves to rump up
production.  <http://www.bulls.co.zw/> Read more >

 <http://www.nedbank.co.zw/> 

DCK to boost bread production.sees a bigger slice of bread market in Zim   

Local company, DCK Investments, is looking to boost its bread output to 230
000 loaves per day after investing in more bakery assets. DCK owner, Douglas
Kwande, told Business Weekly in an interview recently that the company would
soon commission three more plants in Chitungwiza, Bulawayo and Masvingo.
This dovetails with Government's devolution agenda, which among other things
seeks decentralisation of economic activities across the country. The
company, whose other business interests include milling, retail and
agriculture, opened its first bakery in Gweru last year at a cost of US$320
000 with daily capacity of nearly 30 000 loaves. The bakery uses 100 per
cent locally sourced ingredients.  <http://www.bulls.co.zw/> Read more >

BAT volumes to remain subdued   

Local industry will continue to battle low sales volumes in the short to
medium term as the COVID 19 pandemic weighs on consumer disposable incomes.
For listed cigarette maker- British American Tobacco (BAT), sales volumes
are anticipated to remain under pressure during the financial year 2020 due
to erosion of incomes as a result of high inflation now pegged at 785
percent as of May. In the past financial year, sales volume went down 17
percent compared to the prior year. With COVID 19 pandemic, that was
declared a global pandemic, figures from the current financial year are
expected to show significant declines due to reduced trading times as the
country observed lockdown regulations. Zimbabwe implemented a national
lockdown effective March 30 while some businesses had already started
scaling down operations with employees working from home to minimise the
spread of the pandemic.  <http://www.bulls.co.zw/> Read more >

 <mailto:info at bulls.co.zw> 

Tongaat gets US$2m dividend from Zim operations   

Troubled South African-headquartered sugar producer, Tongaat Hulett, said it
got a dividend of US$2 million from its Zimbabwean operations in June 2020.
Tongaat's operations in Zimbabwe comprise wholly owned Triangle operation
and a 50.3 percent holding in Zimbabwe Stock Exchange listed Hippo Valley
Estates. The Zimbabwe operations also used surplus export proceeds to reduce
foreign-denominated borrowings, which decreased to US$6,9 million from US$17
million at March 2019, according to a trading update released by the company
on Wednesday. <http://www.bulls.co.zw/> Read more >

SA investor partners R20m Insiza irrigation project   

FARMERS in Insiza District have partnered with a South African based
investor to establish an 800-hectare irrigation project at an estimated cost
of about R20 million. The project seeks to revive Further Stone Irrigation,
which has been lying idle for over the past 10 years. The development is set
to help improve food supply in the district and the entire province of
Matabeleland South. It will also create employment for the local community.
<http://www.bulls.co.zw/> Read more >

Zim returning to weekly fuel price reviews   

The Zimbabwe Energy Regulatory  Authority (ZERA) on Thursday said it will
revert back to reviewing  prices of fuel on a weekly basis in line with
movements in the exchange  rate which will now be determined through foreign
currency auctions to be conducted every week. Zera had abandoned the weekly
reviews after the exchange rate between  the Zimbabwe and the US dollars
were pegged at 1:25. The Reserve Bank of Zimbabwe on Tuesday introduced the
foreign currency  auction system to determine the exchange rate. When the
auction system kicked off on Tuesday, the local currency  traded at 1:57.36
against the US dollar, and immediately triggered a 150  percent increase in
fuel prices.  <http://www.bulls.co.zw/> Read more >

Auctions must lead to competitive pricing

The essential success of the first foreign currency auction on Tuesday shows
that the system works and that the Reserve Bank of Zimbabwe is not some sort
of evil manipulator, but there are still questions related to the bidders.
For a start everyone is wondering who bid at a rate of $100:US$1 and how did
that bidder get it so wrong, since if the bid had been at half that rate it
would probably have still been successful. This is not just a question for
those wanting a good laugh, but it opens up important inferences and
important assessment of company owners or top managers in the corporate
sector. It also raises queries about what sort of advice bidders sought from
their banks and what advice banks gave.  <http://www.bulls.co.zw/> Read more
>

Export growth helps ART sidestep challenges   

Listed diversified manufacturer, ART Corporation, recorded a 23 percent jump
in export volumes in the first half to March 31, 2020, which contributed to
revenue growth during the period. The improved export performance helped the
group sidestep significant macroeconomic challenges that affected most
businesses in the country. Perhaps foremost problematic among these
macroeconomic factors were the issues of hyperinflation and foreign currency
shortages, which clocked in at 785, 55 percent as at the end of May, 2020.
At the closing period of ART's half year, Zimbabwe's annual rate of
inflation stood at 676, 39 percent.  <http://www.bulls.co.zw/> Read more >

Stock Market Weekly Review   

Stocks maintained a bull run adding 11 percent of value sustained by gains
across board as investors hedge against inflation. The country has for long
been battling inflation and foreign currency shortages that affected
business across sectors. During the week under review the Reserve Bank of
Zimbabwe launched the foreign currency auction system that saw the official
rate pegged at $57 against the greenback until another auction is held next
week. The auction system is expected to bring transparency in foreign
currency allocation as well as stabilise the exchange rate, which is now in
the range of $90 against US$1 on the illegal parallel market.
<http://www.bulls.co.zw/> Read more >

Delta forecasts depressed volumes   

The country's biggest company by market capitalisation on the local bourse,
Delta's sales volume performance in the financial year 2021, is anticipated
to be depressed on the back of obtaining economic headwinds worsened by
Covid-19. Volumes are likely to remain on the downside as inflationary
pressures continue to weigh on disposable income.  This will be coupled with
the negative effects of the Covid-19 pandemic that have already caused some
disruptions to business operations across the world. Experts believe it will
take time for the situation to normalise as well as to allow companies to
recover from the lost sales during the Covid-19 crisis. During its FY20,
Delta suffered sales volumes decline across segments as the market battled
warning disposable incomes. Lager and sorghum beer volumes went down 42
percent and 25 percent respectively while sparkling beverages volumes fell
17 percent.  <http://www.bulls.co.zw/> Read more >

INVESTORS DIARY 2020

Company

Event

Venue

Date & Time

Fidelity Life 

AGM

virtual

26 Jun 2020 100

ZPI

AGM

virtual

26 Jun 2020 1200

Zimpapers

AGM

virtual

29 Jun  2020: 1100

Turnall

AGM

virtual

30 Jun 2020 : 0900

FMP

AGM

Ground Floor, First Mutual Park, 100 Borrowdale Road, Borrowdale

30 Jun 2020 : 0930

DZLH

AGM

virtual

30 Jun 2020 : 1000

Zimplow

AGM

Head Office, 36 Birmingham Road, Southerton

30 Jun 2020 : 1000

FML

AGM

Ground Floor, First Mutual Park, 100 Borrowdale Road, Borrowdale

30 Jun 2020 : 1130

MedTech

AGM

Boardroom, Stand 619, Corner Shumba / Hacha Roads, Ruwa

30 Jun 2020 : 1400

FBC

AGM

by way of remote voting

30 Jun 2020 : 1500

Ariston

AGM

Boardroom, 306 Hillside Road, Msasa Woodlands

07 Jul 2020 : 1100

Dawn Properties

AGM

Ophir Room, Monomotapa Hotel, 54 Park Lane

09 Jul 2020 : 0900

Mash

AGM

Virtual, Boardroom, 19th Floor, ZB Life Towers, 77 Jason Moyo Avenue

09 Jul 2020 : 1200

REST OF AFRICA

Counters Trading Under Cautionary

Africansun

RioZim

CBZH

Turnall

Dawn

Unifreight

Falgold

Zimplow

Zimre

Fidelity

FM Holdings

ZPI

Post your event (AGM, EGM, Analysts Briefing, etc) on the Investor Diary
free of charge and reach out to the market. We have annual gold prices since
1900, monthly since January 1971 and daily prices since January 2000. We
also provide historical ZSE prices on request.

DISCLAIMER: This report has been prepared by Bulls 'n Bears, a division of
Faith Capital (Pvt) Ltd for general information purposes only and does not
constitute an offer to sell or the solicitation of an offer to buy or
subscribe for any securities. The information contained in this report has
been compiled from sources believed to be reliable, but no representation or
warranty is made or guarantee given as to its accuracy or completeness. All
opinions expressed and recommendations made are subject to change without
notice. Securities or financial instruments mentioned herein may not be
suitable for all investors. Securities of emerging and mid-size growth
companies typically involve a higher degree of risk and more volatility than
the securities of more established companies. Neither Faith Capital nor any
other member of Bulls 'n Bears nor any other person, accepts any liability
whatsoever for any loss howsoever arising from any use of this report or its
contents or otherwise arising in connection therewith. Recipients of this
report shall be solely responsible for making their own independent
investigation into the business, financial condition and future prospects of
any companies referred to in this report. Other  Indices quoted herein are
for guideline purposes only and sourced from third parties.

Invest Wisely!

Bulls n Bears 

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