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Zimbabwe: Victoria Falls Stock Exchange to Help Attract FDI

Senior Business Reporter

Government says the establishment of the Victoria Falls Stock Exchange (VFEX), which the Treasury has sugar-coated with a coterie of attractive incentives, will help draw increased foreign direct investment (FDI) into the country.

Finance and Economic Development Minister Professor Mthuli Ncube said apart from the range of peculiar incentives for investors listed on the VFEX, the Government put in place an insurance system for investors’ comfort.

Addressing the Chamber of Mines of Zimbabwe (CoMZ) annual general meeting (AGM) and conference at Elephant Hills Hotel in the resort town of Victoria Falls on Friday last week, the Minister said mining was capital intensive business.

As such, he said the incumbent Government was negotiating with a service provider, Chengetedzai Depository Company, for the installation of a depository system to enable investors to trade in and out of VFEX in a secure manner.

“The Victoria Falls Stock Exchange (VFEX) will be able to assist in attracting (foreign) investment into the country and into the region.

“There are lots of services that will be offered around it,” the finance minister told the delegates.

Investors listed on the relatively new stock exchange will be able to trade in foreign currency while the insurance scheme currently being negotiated will guarantee easier convertibility when investors trade in and out of the exchange.

Minister Ncube said the mining sector was critical to the achievement of objectives targeted under the National Development Strategy (NDS1), and Vision 2030, as such the Treasury would render it its full support.

Other peculiar incentives available to investors on the Victoria Falls stock market include exemption from certain taxes among them the capital gains tax, the withholding tax and lower corporate income tax.

The Government, through the 2019 National Budget Statement, announced its ambitious plans to establish an Offshore Financial Service Centre in the resort town of Victoria Falls in order to lure more FDI.

According to the Reserve Bank of Zimbabwe (RBZ,) FDI fell to US$71 million in the 2020 half year from US$116 million over the same period a year earlier.

FDI reached a post dollarisation high of US$750 million in 2018.

“The Victoria Falls Special Economic Zone has created an opportunity to set up the VFEX OFSC, as a subsidiary of Zimbabwe Stock Exchange (ZSE) main board,” Minister Ncube said.

The offshore financial services centre is similar to what is found in other global jurisdictions, for instance Mauritius, as well as in Ireland, the Caribbean, Luxembourg, Singapore, Hungary and the Netherlands.

He said foreign investment was required to close funding gas, as resources were needed to resuscitate targeted sectors of mining, tourism, agriculture (tobacco) and horticulture.

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Nigeria: Govt Moves to Blacklist Shipping Companies Over Tariff Hike

The federal government has announced that it will not accept any further increase in tariff at the nation’s seaports.

In a yet to be published circular obtained by THISDAY, titled, “Public Notice to Terminal Operators, Shipping Companies and Other Regulated Service Providers in the Port Sector,” the Nigerian Shippers Council (NSC) said it will not accept any tariff increase that will put more burden on shippers and consumers.

It warned that any service provider that unilaterally increases its charges/rates would be blacklisted and sanctioned accordingly.

According to the NSC, “It has come to the notice of the Nigerian Shippers Council that some terminal operators and shipping companies have published notices of proposed increase in tariff.

“The NSC is not aware of any upward review in charges to accommodate certain economic trends in the country.

“However, any such review must be negotiated and approved by the NSC in line with the provisions of the Nigeria Shippers Council Act CAP N133 Law of the Federation (LPN) 2004 and its subsidiary regulations: Nigeria Shippers Council (Local Shipping Charges on Imports and Exports), Regulation 1997, Nigeria Shippers Council (Port Economic Regulator) October 2015 and Nigeria Shippers Council (Port Economic) Regulations 2015.”

The NSC added that any such charges needs to be subjected to analysis with justification to ensure such increase reflects the present economic realities, “and the charges must be directly related to quality of service.”

“It is pertinent to note that certain service providers are already negotiating with the Nigeria Shippers Council in line with established guidelines and the Nigeria Shippers Council will also not unnecessarily delay the process and approval,” it added.

It stated that, “In view of the above, any service provider that unilaterally increases its charges/rates will be blacklisted and sanctioned accordingly.

“Port users are advised to ignore any such unauthorised increase in charges. Note that henceforth the Nigeria Shippers Council will only deal with regulated service providers on individual basis to enhance service delivery at the ports.”

This is coming as freight forwarding associations at the Ports and Terminal Multipurpose Limited (PTML) Terminal, Tin Can Island Port Complex, Lagos, have expressed support for the review of handling charges at the terminal by 50 per cent.

PTML is the biggest roll-on-roll-off (RORO) terminal in Nigeria, handling a sizable chunk of vehicles imported into the country.

In a joint communiqué issued after a meeting with the Managing Director of PTML, Ascanio Russo, and his management team, the major freight forwarding associations said special consideration must be given to PTML because it has not reviewed its charges for almost a decade.

They also argued that the terminal operator must be supported to generate sufficient income to sustain the high quality service being rendered at the facility.

The meeting was attended by representatives of Association of Nigerian Licensed Customs Agents (ANLCA) led by its PTML chapter Chairman, Samuel Obe and Sunny Ugorji; the National Association of Government Approved Freight Forwarders (NAGAFF) represented by its PTML chapter chairman, George Okafor and Thomas Alor, while Emma Ohambele and Chinedum Ogueke represented the Association of Registered Freight Forwarders of Nigeria (AREFFN).

The joint communiqué read: “That the initial plan of 100 per cent from Grimaldi was considered but due to the effect it will bear on the importer it was agreed for 50 per cent increase.

“After a thorough explanation from the management of Grimaldi Agency (owners of PTML Terminal) on the urgent need for this increase, 50 per cent was considered to be reasonable.

“That the acceptance of this increase is based on the ever increasing high cost of operations as can be seen by everyone in the industry. Grimaldi undertake to increase their drive towards the provision of world class logistics services to Nigeria and to provide more equipment and human management urgently where it is required.”

They added, “Grimaldi assured the stakeholders that once they get the promised rebate from Nigerian Ports Authority as promised during the COVID-19 peak period, more provisions of equipment will be made that will lead to reduction in operational cost.

“The management of Grimaldi thanked all stakeholders for this deliberations and understanding. The representatives of the various associations enjoin members to go about their business peacefully as always and are assured that subsequently no increment will be made at the command without an interactive meeting.”

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Zimbabwe: Mash Holdings’ Bluff Hill Housing Project Set for Official Launch

ZSE-listed property investment firm, Mashonaland Holdings Limited’s Bluff Hill housing project is set to be officially launched this Friday following the completion of a model show house that preludes the construction of 24 other units in the next 18 months.

The project experienced major delays due to the advent of the COVID-19 pandemic last year and only commenced construction early this year.

The site sits on 2.3 hectares of land in the Westgate area, close to the shopping mall, and is a kilometer away from the US Embassy.

“Following the partial lifting of COVID-19 restrictions, the Company commenced with the construction phase of the 25-unit Bluff Hill housing project. The construction of a model show house is now complete and pre-selling has begun to manage market risk,” the company said in its latest financial statement.

The area has already been serviced with water reticulation services being done.

The model house consists of 3 bedrooms-one with an en suit bathroom, fitted kitchen, combined lounge and dining room, a veranda, passageway and a single carport.

To add to its grandeur, is a double volume lounge which gives plenty of aeration into the home.

The unit land size range between 542 square metres to 1000 square meters.

“The unit price for this (model) house is around US$ 145 000 before V.A.T payable through various arrangements such as mortgage, hard cash or in installments,” said the company, at a media tour of the project this morning.

“Potential home owners can come with their own mortgage arrangement,” it said.

The company has already begun pre-selling in order to manage market risk which is characterized by weaker spending in the home market owing to headwinds in the economy.

“We intend to complete all the 25 housing units under this project in the next 18 months. That is our target but this will also depend on uptake,” the company said.

The company has also commenced disposal of its 24 fully serviced residential stands in Windsor Park after being issued with the Certificate of Compliance by the Ruwa Town Board.

It hopes that the disposal of the stands and other non-core assets will provide liquidity to enable it to embark on its strategic developments.

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Tanzania: Dse Investors Optimistic Despite Liquidity Drop in May

Dar es Salaam — Despite an 87 percent drop in total market liquidity for the month of May, investors maintain a positive sentiment that the Dar es Salaam Stock Exchange (DSE) will do well in June.

The bourse recorded a total transaction turnover of Sh2.18 billion in May.

This was an 87.47 percent decrease from a turnover of Sh17.4 billion that was registered in April, according to the Zan Securities Limited’s monthly outlook.

However, positive price movements and progressive active participation of investors gives hope for the market in June.

Speaking to The Citizen, the firm’s chief executive officer, Mr Raphael Masumbuko, said with the year about to reach end of the first half, there was a potential for returns regardless of the volatility of the market.

“We have experienced many inquiries from investors and this shows that the appetite is high for both equities and long term securities. We see both compelling opportunities in the stock market and potential for a solid year of returns, attributed by steady growth of DSE All share Index and Tanzania Share Index,” he said.

In May, CRDB Bank Plc held the largest market share. It traded Sh1.24 billion followed by TBL Plc which traded Sh200.84 million, and self-listed DSE with Sh149.31 million.

Other active counters included Twiga Cement which traded a turnover of Sh137.97 million, TCCIA Investment Company Limited (TICL) with Sh62.84 and NMB Bank Plc which recorded a turnover of Sh61.64 million.

In the bond market segment prices still hover at historically high levels attributed by increased liquidity from investors.

The primary market remained very active with aggregate volumes of Sh468.9 billion collected from investors arising from the auction of the 7 year Treasury bond and 20 year Treasury bond, Zan securities reports.

“The Bond markets will be earmarked by high bond prices and relatively low yields attributed to increased liquidity,” said Mr Masumbuko.

The 20-year Treasury bond was issued with a coupon rate of 15.49 percent and fetched a weighted average price of 100.46 with 15.41 percent weighted average coupon yield.

While the 7-year Treasury bond was issued with a coupon rate of 10.08 percent fetching a weighted average price of 99.71, and weighted average coupon yield of 10.1 percent.

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Zimbabwe: Swiss Firms to Strengthen Ties With Local Companies

SWISS companies operating in Zimbabwe are today expected to launch a business chamber aimed at strengthening economic ties with local firms, a move that shows that many international economic players still have huge confidence in Zimbabwe.

The Swiss-Zimbabwe Business Chamber will serve as a platform of exchange for its members and interested parties from Government and business, Mr Richard Nyamanhindi, communication officer from the Embassy of Switzerland said in a statement yesterday.

“The chamber also aims at furthering the development of economic and commercial exchange between Switzerland and Zimbabwe, promote the interests of its members in trade between and in the two countries and link leading international companies and small and medium enterprises from Switzerland and Zimbabwe, promoting best practices,” said Mr Nyamanhindi.

This will augur well with Zimbabwe “is open for business” mantra which seeks to open up the economy to foreign investors.

Switzerland is one of the largest investors in Zimbabwe with companies such as Nestlé having invested significantly in the dairy value chain and continues to come up with measure to empower farmers even at lower levels.

Already, Zimbabwe has a Bilateral Investment Promotion and Protection Agreement with Switzerland.

Last month, Swiss Ambassador to Zimbabwe Niculin Jager paid a courtesy call on President Mnangagwa. He said Zimbabwe was one of the priority countries for “our bilateral cooperation this year.”

“We had an in-depth engagement with President Mnangagwa on bilateral relations between Switzerland and Zimbabwe and shaping the agenda for the 42nd year and what is coming in the future,” he said.

“As you know, Switzerland is one of the largest investors in Zimbabwe so we had a discussion on the economy and investments and the overall situation in the region and in the country and we also talked about re-adjusting our bilateral co-operation and development agency. Zimbabwe is one of the priority countries for our bilateral cooperation this year.”

In 2017, Switzerland and Zimbabwe signed an International Co-operation Agreement on Humanitarian Aid and Technical and Financial Co-operation.

The agreement provides for strengthened cooperation between Switzerland and Zimbabwe for the realisation of humanitarian, technical and financial assistance projects that contributes to sustainable poverty alleviation, democratic development, the promotion of peace and respect for human rights and the rule of law.

Switzerland has been supportive of Zimbabwe’s intentions to clear its debt arrears and normalise relations with the international financial institutions, so it can accelerate efforts to revive and grow the economy and improve investment in the social sectors.

Minister of Industry and Commerce Dr Sekai Nzenza will be the guest of honour during the launch of the chamber.

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Nigeria: ‘Stock Market Resilient to Survive Economic Upheavals’

The nation’s stock market will remain resilient to survive the current upheavals in the economy as well as the security challenges, the Chairman, Securities Dealing Houses Association of Nigeria (ASHON), Chief Onyenwechukwu Ezeagu, has said.

The economy has been experiencing a fragile growth, which is being threatened by the heightened insecurity across the country.

However, speaking on the impact of this development on the stock market, Ezeagu said despite the challenges, the market should remain attractive because it would come out strong.

“The stock market could be said to have become resilient to upheavals in the economy but with the heightened insecurity, we want to believe that the market will survive given that opinion leaders have continually advised the actors to jaw-jaw rather than war-war. We all need to tone down our words and actions for our country to avert catastrophe and ensure that our economy is sustained,” he said.

Speaking on the reduction in foreign portfolio investors (FPI), the ASHON boss said FPIs are highly sensitive investors.

“They react to little negatives not to talk of when mainstream media give subtle hints of insecurity in the land by various scary headlines.

“The penchant for policy somersaults and arbitrariness of actions by the authorities do not give impetus to the attraction of FPIs,” he said.

On the demutualisation of the Nigerian Stock Exchange (NSE), he said it was a great delight to securities dealers in the market because it was long expected.

“The successful completion of the demutualisation process was a great delight to securities dealers. It was long expected and our members have eagerly expected this transition and have expectations. We expect to reap the benefits of shareholding in a fledging exchange, one of the best in Africa,” he said.

He explained that the demutualisation meant that securities dealing firms had transformed from being dealing members firms to shareholders and/or trading license holders.

“We have local investors who are well informed about the changes. But we still need to guide them to follow the consequential changes that may follow the exchange’s new orientation towards profit making,” he said.

Following the demutualisation, the NSE transitioned to Nigerian Exchange (NGX) Group with three subsidiaries. At the formal launch of the new entity last month, the Group Managing Director/Chief Executive Officer, NGX Group Plc, Mr. Oscar Onyema, had said they had a vision to be the premier exchange hub for Nigerian businesses and for the wider African economy building on the strong reputation and corporate governance the NSE had established over the years.

“As we march bravely into the NGX era, we look forward to impact creating partnerships that will unlock value for our stakeholders, whilst improving the state of the Nigerian economy.

“It is a period to reinforce on the global stage, our great African pedigree and the Stock Africa Is Made of,” he said.

Also speaking, the Chief Executive Officer (CEO) of NGX, Mr. Temi Popoola, had said the NGX era was indeed very exciting for them.

“We will continue to champion the growth of the African capital market through trade and investments that will facilitate Africa’s economic recovery and reposition the continent for sustainable economic development.

Partnerships are a critical element of our strategy and we will continue to engage our stakeholders whose support is essential to the achievement of our aspirations in this NGX era,” Popoola said.

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Nigeria: Sell Pressure in BUA, GTBank Forces N20 Billion Market Loss

Trading on the floor of the Nigerian Exchange Group resumed the week with losses due to sell pressure in BUA cement (-4.7%), Guaranty (-1.2%) and WAPCO (-1.2%) as the market capitalisation declined by N20.7 billion to close at N20.2 trillion.

The All-Share index fell 0.1% to 38,686.40 points while the Year to date loss worsened to -3.9%.

Trading activity was mixed as volume traded rose by 5.9% to 210.8m units while value traded fell by 5.7% to N1.5bn.

The most traded stocks by volume were FBNH (16.6m units), Wapic (16.5m units), and Chams (16.2m units) while Zenith (N365.9m), Seplat (N134.2m), and FBNH (N121.0m) led by value.

Across sectors, performance was bearish as five indices lost while one index gained.

The Oil & Gas index was a lone gainer, up 0.3% due to buying interest in Conoil (+9.6%) and Ardova (+2.7%).

Conversely, the Insurance and Banking indices fell by 1.9% and 0.9% respectively, following price depreciation in AIICO (-2.6%), Mansard (-1.1%), Guaranty (-1.2%), and FCMB (-4.6%).

Similarly, the Consumer and Industrial Goods indices declined by 9bps and 7bps respectively on the back of sell pressure in Unilever (-4.2%) and Wapco (-1.2%). In the same vein, AFR-ICT index lost, down 1bp due to sell-offs in CWG (-9.8%).

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Tanzania: Dar Exchange Market Maintains Strong Weekly Performance

THE domestic market sustained the bullish rally that began a few weeks ago as the domestic market capitalization slightly rose by 0.28 per cent during the week that ended on the 04th of June 2021.

The Tanzania Share Index (TSI) went up 10.19 points to close the week at 3,625.41 points following the rally on the domestic market cap which closed the week at TZS 9,545.57bln ($4.13bln). The rally of the domestic cap was influenced by three counters which were the only ones that recorded price movements during the week.

CRDB went up by 3.51 per cent as the counter came to the end of its dividend run, with the ex-dividend period beginning on Monday, 07th of June 2021. CRDB closed the week at 295/-. Other gainers were JATU which gained 3.45 per cent and Tanga Cement (TCCL) which rose by 2.53 per cent.

JATU was only active on Monday, before getting suspended from trading on Tuesday, 01st of June, 2021, to give space to the ongoing Initial Public Offering (IPO) of the company. JATU is looking to raise TZS 7.5bln ($3.25mln) by offloading 15mln shares to the public at the price of TZS 500/- per share.

JATU also split its existing shares on a ratio of 2:1, that is, every shareholder that had JATU shares now has twice the initial amount. If the counter was still trading, it should have been trading at 600/- following the split, thus effectively the IPO price included a 16.7 per cent discount from the market price.

Upon an expected successful IPO, JATU plans to use the fund to refurbish its Kiteto farming project in Manyara which has 5,000 acres of maize and sunflower. The company plans to purchase about 17 tractors and other farming equipment, put in place an irrigation scheme that shall produce three harvests annually, and construct a flour milling factory that shall process up to 50 tons of flour per day.

The IPO was opened on the 01st of June, 2021, and is expected to close on the 15th of July, 2021 while the allotment to be done on the 19th of July the same year. In case of an oversubscription, the company has a greenshoe option of up to 50 per cent of the offered amount, which gives the company room to raise to TZS 10.5bln ($4.5mln).

The expected listing date is 29th July 2021 and the suspension from trading is to be lifted during the same day. On the other hand, similar to the TSI, the All Share Index (DSEI) gained 6.59 points thanks to rallies in both, domestic and cross-listed boards.

On top of domestic gainers, a staggering 32.9 climb of the National Media Group (NMG) and a slight 0.99 per cent uptick of the East African Breweries (EABL) pushed up the total market capitalization by 0.31 per cent. KCB bank fell by 1.08 per cent but was offset by the gainers as the total market cap closed the week at TZS 16,506.70bln ($7.15bln).

The DSEI closed the week at 1,985.57 points. The total equity turnover fell by 63.2 per cent compared to the previous week, as activities slowed down on the CRDB counter. The total turnover during the week amounted to a total of TZS 180.68mln ($0.078mln).

The total volume traded fell by a similar proportion of 63.9 per cent to a total of 526,055 shares traded in 196 deals. CRDB retained the top mover position after accounting for 79.3 per cent of the total turnover. Activities on the CRDB counter are expected to lower down during the following week as the counter enters the ex-dividend period.

Once again the market was highly dominated by local investors as foreign investors took a back seat at the most part. Local investors accounted for 65.82 per cent of the total investments into the market while foreigners accounted for the balance. The total divestments side was dominated by local investors by 100 per cent.

Market, Bills and Bond

At the beginning of the week under review, the interbank rate traded above 4 per cent for the first time since the end of February while the total value of interbank transactions on the Interbank Cash Market (IBCM) almost doubled. The value of transactions went up 65.7 per cent every week, to sum up at TZS 5.8bln ($2.5mln) as the number of trading sessions increased.

The interbank rate traded at the peak of 4.22 per cent on Monday but later relaxed to close the week at 4 per cent which is 20bps up compared to the previous week.

Currency Market

The shilling has traded only above TZS 2,310/- against the greenback since it crossed the mark during the beginning of the previous week.

The shilling slightly depreciated by a pip every week and closed the first week of June at a weighted average exchange rate of TZS 2,310.04/USD. The value of transactions on the Interbank Foreign Exchange Market (IFEM) went up slowly by 10.7 per cent to a total of $4.6mln.

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South Africa: Anglo Completes Demerger of South African Thermal Coal Assets – Thungela Debuts On JSE

Anglo American has completed the demerger of its thermal coal assets in South Africa, giving rise to Thungela Resources, which saw its shares sink on its Monday debut on the JSE.

Coal assets are being treated like lumps of coal in mining portfolios. Coal’s links to the climate crisis and pollution have made shareholders and the wider public leery of fossil fuel.

Raising finance for new coal projects is increasingly difficult and huge markets like the European Union are planning to impose carbon emissions charges on imported goods.

Anglo American is committed to making all its operations carbon neutral by 2040. This makes coal an awkward fit in its portfolio, and shareholders, including the pension board for the Church of England (COE), have been pressing it to exit such assets. And so, as the company announced in April, it has spun off its thermal coal operations in South Africa into a new listed entity, Thungela Resources.

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Nigeria: Dangote Cement, Conoil, Oando Top Stocks to Watch This Week

Nigerian stocks added N245 billion last week and the market is expected to maintain the momentum this week.

Last week, Nigerian stocks added N245 billion as the market reported appreciation on all trading days except Tuesday, with corporate actions and other developments shaping Premium Times Stocks to Watch.

We have put together a few stocks you may want to watch out for this week based on how the market fared last week and some fundamental factors.

Premium Times Stocks to Watch assembles equities with potential for good return on investment.

An investor may randomly assemble stocks for investment purposes. We have collated a range of stocks, adopting rigorous analytical approaches to save you the hassle of randomly picking equities for investment.

This is not a buy, sell or hold recommendation. You may have to involve your financial advisor before taking investment decisions.

DANGOTE CEMENT PLC

Dangote Cement tops our list by virtue of the proposed resumption of its share buyback programme.

The <a target=”_blank” href=”https://www.investopedia.com/terms/e/eps.asp”>Earnings Per Share</a> (EPS) of the cement maker is N17.83, while its <a target=”_blank” href=”https://www.investopedia.com/terms/p/price-earningsratio.asp”>Price to Earnings</a> (PE) ratio is 12.34.

CONOIL PLC

Conoil features on our list on account of its proposal of N1.50 dividend per share for financial year 2020.

The firm’s EPS is N2.19, while its PE ratio is 8.54. The qualification date is 2nd July, while the payment date is to be announced.

OANDO PLC

Oando makes our list for trading well below its intrinsic value. It has a PE ratio of 1.23 and an EPS of N2.32.

UNITED BANK FOR AFRICA PLC

<a target=”_blank” href=”https://markets.ft.com/data/equities/tearsheet/summary?s=UBA:LAG”>UBA</a> appears on our list on the basis of trading significantly below its real value. Its PE ratio 2.10 and its EPS is N3.41.

C&I LEASING PLC

C&I LEASING features on our list for currently trading pretty much below its intrinsic value. Its PE ratio is 2.41 and it has EPS of N2.01.