News Update as @ 1530 hours, Tuesday 22 July 2014Feedback: bh24admin@zimpapers.co.zwEmail: bh24feedback@zimpapers.co.zw

By Rumbidzayi Zinyuke

Finance Minister Patrick Chinamasa says there have been no takers for tax incentives he offered in the 2014 national budget for any long term deposits made in the banking sector.

Giving oral evidence to the Parlia-mentary Portfolio committee on Finance and Economic Development yesterday, Minister Chinamasa said the tax break was meant to increase the long term deposits which would in turn increase long term loans to the productive sectors.

Zimbabwe’s financial system has been in crisis since 2000 and the unstable liquidity situation has forced banks to provide short-term funding to industries. Government has, how-ever, been trying to revive long term funding which will see the growth of

both the financial and productive sec-tors.

“In my budget, l said we want to address the lack of long term funding to the productive sector by promot-ing medium to long term instruments of savings. I gave a tax incentive to exempt any profits made from par-ticipating in those instruments from tax but we are yet to see any takers for those incentives,” he said. He said the instruments such as the Paid Up

Permanent Shares, Negotiable Cer-tificate of Deposit, hire purchase and Lease hire need to be brought back if the financial services sector is to grow. He said the lease hire and hire purchase instruments were used to facilitate procurement of industrial and agricultural equipment and could be repaid over five years while the NCDs were for short term trading and could be paid back over 6 months.

“We need to bring back these instru-ments; we need to encourage the public to invest in those long term instruments. Only then will it be pos-sible for the financial services sector to lend long term,” he said. Minister Chinamasa said although deposits had grown to about $4,7 billion, 95 percent are demand deposits which cannot be used for on-lending on a long term basis. He said demand deposits were contributing to the

liquidity challenges being faced in the economy since the money could not be circulated as freely as long term deposits.

On indigenous banks struggling to meet capital requirements, Minister Chinamasa said those banks should consider joining the micro-finance sector.

“Microfinance houses allow deposits so you loose nothing by becoming a microfinance bank instead of a big bank which is requiring $25 million for capitalisation. I did ask the RBZ to go easy on enforcing capital ade-quacy ratios. But what this means is that banks must at the end of the day know their capital level and work with that,” he said. He added that the country needs a strong indigenous financial sector in order to mitigate the liquidity crisis. •

No takers for financial tax breaks

Minister Chinamasa

BH24

3 NEWS

By Lynn Murahwa

ZB Financial Holdings says it has taken a new direction to meet the group’s thrust of creating value and growing its business.

In a statement, ZB corporate commu-nications manager Esther Toto said the group has realigned itself to reaching its goals that fit into the constantly changing business environments.

”With the ever changing environment , our customer needs and deliberate shifting in strategy it was important that we relook at our vision and mis-sion statement to align them with the new direction,” said Toto.

She said the previous vision and mis-sion was relevant to where the busi-ness was and the strategic focus at that time.

Toto also said the new vision focuses on wealth creation and value addition.

” The new vision is ‘Passionate Focus on Wealth Creation for You’, the mission ‘To create unparalleled Value’ and our values are innovation, service excel-lence, integrity, learning and sharing.

“It aligns with our strategic focus on superior customer service delivery, it aligns with our commitment to being the best financial services provider and it ensures that our behaviour and

actions are geared to one cause,” she said.

She said the group has commenced training for all employees to improve

on skills and service delivery. Last month the group disposed of two of its companies after low performance with no hope of clear sign of turning prof-its. •

ZB changes business strategy

4 NEWS

BH24 Reporter

Safeguard Alarms has introduced a new outdoor wireless security system, the Safeguard Sentry, that provides an early warning alert if there is an intruder on the premises.

The system consists of two or more “sentry” units with passive infrared

sensors that emit invisible beams in a 100 degrees arc and a hand-held con-trol station.

The sensors can detect movements up to 20 metres away but can be adjusted to monitor shorter distances.

The “sentries” are powered by batter-ies that last for at least a year but can

last up to two years. They send a signal to the control station every 20 minutes to verify signal, battery and operational status.

Safeguard Alarms managing director Reason Chitiva said the system can be installed as a stand-alone system or be fully integrated with an existing alarm system on any property.

“Unlike old outdoor alarm systems that required trenching to place cabling, this system is easy to install as it is wireless. It is battery operated, so there are no worries that the property is unmoni-tored in the event of a power cut.

“It is weatherproof and ideal for mon-itoring areas where there is a swim-ming pool pump, electric gate motor or car park or for just monitoring areas around the outside of a house or other building.

“It can also be used at commercial properties, mines, farms and industrial warehouses,” Chitiva added.

He said an outdoor system such as this ensures that the alarm is activated before an intruder enters a building rather than when he has already bro-ken into premises.

Chitiva said all units are wireless and each “sentry” is normally fixed on a bracket to a wall, post or tree but being wireless can be taken to a different site. •

Safeguard introduces wireless beams for improved outdoor security

BH24

By Rumbidzayi Zinyuke

Beverages giant Delta Corporation recorded a three percent decline in revenue for the first quarter to June 30 2014 as demand for lager beer remains low due to the subdued eco-nomic activity.

“Consumer demand remains depressed in line with prevailing sub-dued economic performance. The stretched consumer is now focussing on value for money products,” the company said.

Total volumes for the quarter were one percent up on prior year reflect-ing some changes in the sales mix as witnessed in the full year to March.

The company’s earnings have been

on a decline after it recorded a 9 per-cent decline for the full year to March 2014.

For the period under review, Delta

recorded sustained growth in sor-ghum beer and alternative beverages against declines in lager beer and sparkling beverages.

The lager beer volume was 21 per-cent below prior year while sparkling beverages are 8 percent down.

The increased production capacity of Chibuku super resulted in a 15 per-cent growth in sorghum beer sales while alternative beverages, mainly Maheu, were up 22 percent on prior year with some encouraging uptake on the new dairy mix and drinking yoghurt beverages.

Delta controls about 96 percent of the beer market and about 92 percent of the sparkling beverages in the coun-try. •

6 NEWS

Delta Q1 revenue declines

BH24

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BH24

The equities market shed off yes-terday’s loses after gaining a mar-ginal 0,08 percent. The Industrial index gained 0,14 points to close trade at 185.86 points on the back of increases in several heavyweight counters.

First Mutual added a cent to 5 cents

while TA Holdings rose 0.51 cents to close at 16.51 cents. Telecomms giant Econet gained half a cent to 73 cents and NicozDiamond picked up 0.2 cents to 1.2 cents. Starafrica was 0.05 cents firmer at 1.15 cents.

Only two counters traded in the red today with retail giant OK shedding

0.51 cents to close at 16.99 cents and Padenga trading 0.2 cents weaker at 7.8 cents.

The Mining index was steady at 57.44 points as Bindura, Falgold, Hwange and Riozim remained unchanged at previous trading levels. ― BH24 Reporter •

9 ZSE REVIEW

ZSE in marginal gains

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BH24

Finance minister Patrick Chinamasa got it right: there are no quick-fixes for our economy! This is one little secret Zimbabweans loathe to face. The sooner we stop pretending that we can reverse the decline experienced in the past decade over the next year or so, the faster our nation will be able to safely and soundly recover.

This crisis is not like all others faced by African countries. It is unique in its own right and has thousands other contributing factors like sanctions and a very negative perception. Thus it deserves its own solutions.

Massive debt is suffocating our growth, having grown to $10 billion and our huge import bill is not helping either. We keep importing goods that bring no value to our economy while the productive sectors suffer. Worse yet, Government is the biggest importer, with the recent importation of vehi-cles for legislators at a cost of $11 million being one example where our priorities are wrong. With unemploy-ment growing to 11 percent and GDP slipping below average levels and the housing and consumer sectors, which

usually lead a recovery, worsening by the day, we have a lot of work to do.

Our problem is abundantly clear: we want easy solutions that come to us as we sit back and moan about our situation and blame everyone but our-selves for the situation we are in.

We first need to stop moaning about everything and start working. As the minister rightly said “the days of burn-ing money and miracle money are over. We must exhort our people to put their shoulders to the wheel and work for the economic recovery of our

country.” Government should keep selling the idea that we cannot keep camouflaging a collapsing economic structure; rather, we must restore its integrity

But Zimbabweans cannot just wait for Government all the time. We need to work on the perception other coun-tries have of us. It’s not only Govern-ment who should do this but every Zimbabwean who opens their mouth to talk about the country. Once per-ception improves, then we start work-ing on other avenues.

What more can the Government do? It can increase confidence, which is the best stimulus hard to quantify but of enormous benefit. In that regard Minister Chinamasa has created a committee that will ensure that the country’s debt doesn’t grow again by curbing parastatals’ borrowing capac-ity. Those that overspend their budget allocation also face the wrath of the law.

This plan should set us on a path to balanced budgets. We also need to reduce that import bill. Even though

our industries are not producing enough to meet demand, we should take up what they produce and then import the deficit only. Our industries need to be capacitated so that they are restored to their former glory.

Instead of Government’s import bill growing on non-essentials, it should be dominated by machinery and inputs for the productive sector.

Health and education, once our best asset, are also beset by problems in all levels. We need to capacitate these sectors so that we can churn out ded-icated professionals who will not run for greener pastures once an opportu-nity presents itself.

Lastly, we also need to produce enough to export and not only rely on importing. We are making those coun-tries all the more richer than us!

These are but some of the areas that are necessary to secure a bright future. We can bear our current malaise. The tragedy would be to pass the status quo to our children and grandchildren. •

11 BH24 COMMENT

There is definitely no quick-fix to our economy!

Minister Chinamasa

BH24

South Africa’s biggest employers group by number of workers agreed to offer a 10 percent pay increase to low-level earners over three years to end a strike that’s entering its fourth week.

The Steel and Engineering Industries Federation of Southern Africa “ reluc-tantly accepted” the proposal from the Labour Ministry at a meeting yesterday, the Johannesburg-based employers’ lobby said in an emailed statement today. The offer has been approved by a “slim majority of employer associa-tions,” it said.

More than 220,000 metalworker employees have been on strike since July 1, affecting about 12,000 com-panies including Nampak Ltd. (NPK), Africa’s biggest beverage-can manu-facturer, and carmakers such as Toyota Motor Corp.

(7203) and General Motors Co. (GM) The walk-out is being led by the National Union of Metalworkers of South Africa, the country’s biggest labor group.

“Seifsa is presenting the offer to

the unions, including Numsa today,” spokesman Ollie Madlala said by phone. The labor groups have until end of July 25 to accept the offer. The deal includes a demand to tighten an agree-ment that says future employment issues must be negotiated at national rather than company or plant level.

“Numsa’s National Executive Commit-

tee will meet later on today to discuss the new offer,” spokesman Castro Ngobese said by phone, declining to comment further. General Secretary Irvin Jim said July 17 that the union is willing to accept a two-year wage deal with a 10 percent per annum increase.

Job Losses

The pay rises proposed by Labor Minis-ter Mildred Oliphant will probably lead to “massive job losses,” Seifsa Chief Executive Officer Kaizer Nyatsumba said in the statement, as companies seek to reduce costs that can’t be passed on to customers. The indus-try employs about 1.8 million people, according to Statistics South Africa.

“We expect manufacturing employ-ment to fall by 220,000 over the next three to five years as a result of these excessive wage increases,” Loane Sharp, labor economist at Adcorp Holdings Ltd. in Johannesburg, said by phone.

“Manufacturing employment is very sensitive to wages because the work-ers are not particularly skilled and com-petition among workers is significant,” he said.

The strike is costing the industry about 300 million rand ($28 million) a day, according to Seifsa. The walkout may lead to a slowdown in economic growth if it isn’t resolved, Reserve Bank Governor Gill Marcus said July 17. ― Bloomberg •

13 REGIONAL NEWS

South Africa Employers Accept 10% Three-Year Deal to End Strike

BH24

15 DIARY OF EVENTS

The black arrow indicate level of load shedding across the country.

POWER GENERATION STATSGen Station

14 July 2014

Energy

(Megawatts)

Hwange 421 MW

Kariba 750 MW

Harare 45 MW

Munyati 29 MW

Bulawayo 0 MW

Imports 0 MW

Total 1245 MW

23 -25 July - Mine Entra, Place: Zimbabwe Inter-national Exhibition Centre, Bulawayo

24 July - OK Zimbabwe Thirteenth Annual Gen-eral Meeting Place: OKMart Functions Room, First Floor, OKMart, 30 Chiremba Road, Hillside, Time:

15:00 hours.

1 August - Sixteenth Annual General Meeting of the members of Econet Wireless Zimbabwe Limited, Place: Econet Park, 2 Old Mutare Road, Msasa, Harare, Time; 10.00am

THE BH24 DIARY

BH24

17 ZSE

ZSEMOvERS CHANGE ToDAY PRICE USC SHAKERS CHANGE ToDAY PRICE USC

TA 60.00% 16.00 FIDELITY LIFE -6.25% 7.50

PEARL 11.53% 2.90 RIOZIM -4.76% 20.00

CBZ 8.33% 13.00 OK ZIM -2.77% 17.50

MASIMBA 5.55% 1.90 ECONET -2.02% 72.50

OLD MUTUAL 0.15% 258.00 TSL -1.87% 26.10

SEEDCO -0.01% 78.00

IndicesINDEx PREvIOUS ToDAY MOvE CHANGE

INDUSTRIAL 185.93 185.72 -0.21 POINTS -0.11%

MINING 57.83 57.44 -0.39 POINTS -0.67%

Stocks Exchange

Previous

BH24

19 AFRICA STOCkS

Botswana 8,664.65 -11.96 -0.14% 12July

Cote dIvoire 246.37 +2.18 +0.89% 07Mar

Egypt 7,949.60 -75.68 -0.94% 06Mar

Ghana 2,354.16 -7.26 -0.31% 18June

Kenya 4,896.77 -13.83 -0.28% 21July

Malawi 12,662.47 +0.00 +0.00% 07Mar

Mauritius 2,074.51 -3.51 -0.17% 07Mar

Morocco 9,544.10 +21.01 +0.22% 07Mar

Nigeria 42,784.30 -107.52 -0.25% 21July

Rwanda 131.27 +0.00 +0.00% 24Oct

Tanzania 2,018.97 +25.40 +1.27% 07Mar

Tunisia 4,624.39 -39.32 -0.84% 07Mar

Uganda 1,503.90 +0.81 +0.05% 10Sep

Zambia 4,242.74 +14.95 +0.35% 10April

Zimbabwe 185.72 -0.21 -0.11% 21July

African stock round up Commodity Prices

Name Price

Crude oil 1,300.91 -0.21%

Spot Gold USD/oz 1,292.63 -0.26%

Spot Silver USD/oz 19.38 -0.46%

Spot Platinum USD/oz 1,421.25 -0.33%

Spot Palladium USD/oz 798.50 -0.64%

LME Copper USD/t 6,770 -0.18%

LME Aluminium USD/t 1,780 -1.17%

LME Nickel USD/t 18,230 -1.73%

LME Lead USD/t 2,095 -1.41%

Quote of the day — "In lIfe, as In a football game, the prIn-cIple to follow Is: hIt the lIne hard." -theodore roosevelt

Globalshareholder.com

BH24

Asian stocks touched a three-year peak on Tuesday, despite lingering concerns about crises in Ukraine and Gaza, while the yen eased against the dollar and the euro.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.5 percent to its highest since 2011, while Japan's Nikkei stock average rose about 1 per-cent after a national holiday closed mar-kets on Monday.

"Investor sentiment has settled as the VIx has stayed calm," said Akio Yoshino, chief economist at equity research and strategy department at Amundi Japan.

The CBOE Volatility Index, which is a gauge of market risk aversion, jumped 32.2 percent on Friday in Asia, the big-gest percentage rise since April 2013.

U.S. shares slumped overnight, as the rising global tensions offset some upbeat U.S. earnings. So far this report-

ing period, 66 percent of S&P 500 com-panies have topped Wall Street's profit expectations, according to Thomson Reuters data, above the 63 percent average since 1994.

But the three major U.S. indexes ended well off their lows, a sign that some appetite for riskier assets remained, and S&P 500 E-Mini futures edged higher in Asian trade.

Malaysia has reached an agreement

with the leader of the separatist group to retrieve the bodies of the victims from last week's downing of a Malaysia Air-lines passenger jet as well as the plane's two black boxes, Malaysian Prime Minis-ter Najib Razak said on Tuesday.

Meanwhile, in the Gaza Strip, the Pal-estinian death toll jumped to more than 500 and Israeli losses mounted as well, as the United States stepped up efforts to secure a ceasefire. ― Reuters •

21 INTERNATIONAL NEWS

Asian shares push higher, shrug off global tension

By Munetsi Madakufamba

Continued from yersterday

Yet such attention, given the tempting nature of Africa’s resources, may lead to undesired consequences unless the leadership of the continent makes cer-tain major decisions, including insist-ence on technological transfer in order to turn the primary commodities into high-value finished products for inter-national trade.

Third, the arrival of China and other

BRICS countries (Brazil, Russia, India, South Africa) on the global stage has democratised access to capital as well as widened options.

Gone are the days when decisions on flow of capital into Africa were dictated by the former colonial metropoles.

Shanghai and other international cap-ital markets now offer a much wider menu for countries wanting to attract foreign direct investment. Fourth, the problem of infrastructure has been cor-rectly identified and therefore receiving

political attention in Africa.

SADC adopted its Regional Infra-structure Development Master Plan (RIDMP) in August 2012 as the sub-re-gion’s strategy for the development of integrated regional infrastructure to meet projected demand by 2027.

Fifth, regional integration offers the best option for member states to enjoy economies of scale that may be required to tackle some of the current challenges.

For example, some of the infrastruc-ture projects identified under RIDMP would make economic sense only if pursued as sub-regional projects.

From a demographic perspective, the combined population of SADC is about 280 million, while that of the entire continent is just over one billion people, which compares favourably with other regions of the world.

The challenges facing SADC and many other African economies are as diverse as the number of countries that make up the continent, and it is important to acknowledge from the outset that while Africa is one continent, it is not made up of a homogenous group of countries, and so are the many regional economic communities spread across the continent.

All developing countries that have suc-cessfully made the transition from low income to middle and high income status, such as China and the East Asian Tigers as well as Latin American countries, have done so by relying on a strong manufacturing sector as the driver of an export-oriented growth

22 ANALYSIS

Prospects for industrial development in SADC