17 January 2014 - firstmutualholdings.com

MACROECONOMIC INDICATORS
ECONOMIC UPDATE: 17 JANUARY 2014
Inflation: December 2013 annual inflation at 0.33% down from 0.54% in November 2013
due to the low level of growth in prices for goods which in turn implies that economic
growth is currently facing severe challenges. The m-o-m inflation rate was at -0.08% in
December from 0.09% in November 2013.
Inflation rate profile 2013
m-o-m
1.50
3
1.00
2
0.50
1
0.00
0
m-o-m (%)
Y-o-Y (%)
Y-o-Y
4
-0.50
Jan
Mar
May
July
Sept
Zim second best Safari destination: Zimbabwe is now the second most preferred
destination for family oriented safaris after South Africa on the continent. South Africa
remains the main destination for the family oriented safaris. This is because the southern
part of the country is free from malaria. (Euromonitor International).
Nov
Table 1: Key ZSE market statistics
ZSE Ind. Index (pts)
ZSE Min. Index (pts)
Mkt Cap (US$bn)
T/over (US$m)
CZI says industry needs $8bn: Zimbabwe's manufacturing industry requires about $8bn for
working capital and equipment upgrades in order to curb a downward spiral in capacity
utilisation and collapse of firms due to viability challenges. An estimated $5bn is required
just to replace obsolete industrial equipment. (Confederation of Zimbabwe Industries).
LOCAL EQUITIES REVIEW: 17 JANUARY 2014
17-Jan-14
10-Jan-14
202.73
38.82
5.63
1.84
204
41.97
5.62
3.58
Weekly
YTD
Change
-0.62%
-7.51%
0.18%
-48.60%
Change
0.30%
-15.22%
1.26%
Industrial Index lost 0.62% to close the week at 202.73points with YTD returns up 0.30%.
Mining index shed 7.51% to close the week at 38.82% with YTD returns down 15.22%. Top
risers for the week included Falgold and FML which added 25.00% and 23.60% respectively.
Fallers for the week included Willdale and Hwange which shed 50.00% and 31.89%.
Cumulative foreign purchases for the week amounted to $5.41m whilst cumulative foreign
sales amounted to $6.87m.
Turnover on Friday was $1.84m with Delta contributing the huge chunk of $1.22m
representing 66.15% of market turnover.
Table 2: ZSE Top 5
Weekly
%Δ
25.00%
23.60%
20.00%
7.14%
5.56%
Top 5
FALGOLD
FML
COLCOM
CAFCA
HIPPO
CORPORATE HIGHLIGHTS: 17 JANUARY 2014
YTD
%Δ
0.00%
22.22%
9.09%
7.14%
5.53%
Afsun: FY’2013 Revenue $56.28m, Gross Profit $40.97m, Operating profit $4.25m, Loss
before income tax $5.94m and Total comprehensive income for the period $7.00m
Bindura: Mwana Africa reported a more than 76% increase in nickel and concentrate sales
from the Trojan mine in Zimbabwe as it revealed mixed results in its latest quarter. Trojan is
owned by the group's subsidiary Bindura Nickel Corporation and for the 3 months to 31
December 2013 revenue from the mine was 74% higher at $24.5m due to the higher sales
volumes.
Table 3: ZSE Bottom 5
Weekly
%Δ
-50.00%
-31.89%
-28.57%
-25.00%
-15.38%
Bottom 5
WILLDALE
HWANGE
MEDTECH
ARTZDR
FIDELITY
YTD
%Δ
-50.00%
-31.89%
-28.57%
0.00%
-15.45%
Table 4: Regional Equities
ZSE Ind. Index
Botswana DCI
JSE All Share
Nigeria All Share
17-Jan-14
10-Jan-14
202.73
9,168.16
46,824.16
41,693.57
204.00
9,104.54
45,681.59
40,970.70
Weekly
%Δ
-0.62%
0.70%
2.50%
1.76%
YTD
%Δ
0.30%
1.57%
2.41%
1.13%
Delta: For Q3 ended 31 December 2013 revenue was down 3% and up 2% for the 9 months.
Total beverage volume for the quarter was flat against the same period in 2012 and up 2%
for the 9 months. The decline in lager beer volumes continued, registering a 25% drop versus
prior year for the quarter and 15% for the 9 months. This is mainly a result of retail price
distortions triggered by the increase in excise duties of December 2012.
Econet: Econet Wireless Global acquired 8.6% in its subsidiary Liquid Telecom held by
Johannesburg Stock Exchange listed technology company Altron. Altron stated that Econet
had agreed to pay $55m for the stake. The transaction was done at a valuation of Liquid
Telecom of $640m.
Innscor: Innscor Africa Limited moved its headquarters to Mauritius as part of a calculated
move to enhance access to cheaper finance to support its domestic and foreign expansion
programme.
SSA equities market review…..
Sub-Saharan Africa exchanges traded in the positive with JSE All Share leading the rally
gaining 2.50% followed by Nigeria All Share which gained 1.76%.
Table 5: Money Market
LOCAL MONEY MARKET REVIEW: 17 JANUARY 2014
Money Market Rates for the week Ended 17 January 2014
Tenor (Days)
17-Jan-14
10-Jan-14
7
4%
5%
30
60
90
7%
8%
9%
7%
8%
8%
1|G r o u p I n v e s t m e n t s R e s e a r c h
We expect rates to remain flat ranging from 4% - 7% for 7 to 30 days and 8% - 9% for 60 to
90 days as the liquidity crunch persists. Rates profile is also reflective of the individual bank
risk profile with Tier 1 banks offering between 2%-8% across the board and Tier 2 as high as
12% on longer dated tenure.
COMMODITIES & CURRENCIES REVIEW: 17 JANUARY 2014
Table 6: Mining Commodities
Gold
Nickel
Copper
Silver
Platinum
Crude
Mining Commodity Prices 17 January 2014
17-Jan-14
10-Jan-14
Weekly
1,247.70
1,234.82
1.04%
14,485.00
13,360.00
8.42%
7,345.00
7,281.00
0.88%
20.19
19.80
1.97%
1,444.20
1,419.00
1.78%
106.27
106.82
-0.51%
Mining & Agriculture…..
YTD
2.79%
3.39%
0.68%
1.20%
4.03%
-2.52%
Table 7: Agro-commodities
Agro Commodity Prices for the Week Ended 17 January 2014
17-Jan-14
10-Jan-14
Weekly %Δ
YTD %Δ
Coffee* (lb)
1.1081
1.11159
-0.31%
4.73%
Maize (mt)
167.62
167.72
-0.06%
0.89%
Cotton (lb)
0.8479
0.8467
0.14%
0.18%
Sugar (lb)
0.1523
0.1606
-5.17%
-7.19%
Wheat (mt)
273.55
277.04
-1.26%
-1.46%
All mining commodities registered gains, the largest mover being nickel which added 8.42%.
Silver, Platinum and Gold gained 1.97%, 1.78% and 1.04% respectively. Impala Platinum share
price dropped 10% on the Johannesburg Stock Exchange in the past week following investor
concerns over threatened beneficiation requirements by Zimbabwean government on its unit
Zimplats. This comes on the back of escalated pressure by Harare to have platinum miners
construct a refinery in the country. Locally, Gwanda-based gold miner Duration Gold needs
about $10m to increase production in order to achieve economies of scale and lowering
costs.
Maize, coffee, wheat and sugar registered losses of 0.06%, 0.31%, 1.26% and 5.17%
respectively. Cotton was the only commodity to trade in the positive gaining a marginal
0.14%.
Currencies…..
The dollar weakened against the pound after a report showed UK retail sales increased by
more than anticipated in December 2013. Rand and pula depreciated 0.83% and 0.45%
respectively against the greenback.
DIARY OF UPCOMING EVENTS
Table 8: Forex Market
Exchange Rates for the week ended 17 January 2014
CCY
Cross Rates
17-Jan-14
10-Jan-14
Weekly %Δ
YTD %Δ
EUR /US$
1.35787
1.35948
-0.12%
2.84%
GBP /US$
1.6446
1.64109
0.21%
1.15%
US$/ZAR
10.8533
10.7638
-0.83%
-28.30%
US$/JPY
104.237
105.029
0.75%
-20.18%
US$/BWP
8.9445
8.9047
-0.45%
-11.29%
US$/KES
85.7999
86.6799
1.02%
1.99%
US$/UGX
2,494.94
2,514.96
0.80%
6.21%
US$/ZMK
5,530.00
5,519.90
-0.18%
-5.37%
Investors Diary
Company
Event
Innscor
PG Industries
Interfin
TSL
EGM
EGM
AGM
EGM
Venue
Royal Golf Club
Royal Golf Club
Tendeseka
Simon Mazorodze
Date & Time
24 January, 8:15am
24 January, 9:00am
30 January, 10:00am
31 January, 12:00pm
CONTACT US:
GROUP INVESTMENTS DEPARTMENT
TEL: 04-886000-17 | DIR: 04-886072
Thomas Mutswiti
Tendaishe Gwitima
Tich Matuku
+263 77 210 1398
+263 77 216 6671
+263 77 403 9498
[email protected]
[email protected]
[email protected]
DISCLAIMER: This report has been prepared by First Mutual Holdings Ltd for internal use & 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 FML nor its subsidiaries 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
2|G r o u p I n v e s t m e n t s R e s e a r c h

Download Report