Mashonaland re-considers Hazeldene plans

By Tawanda Musarurwa

HARARE – Property holdings and management company Mashonaland Holdings has said it is re-strategising on the development of its Hazeldene landbank, which might see the abandonment of earlier plans to turn the project into a housing devel-opment.

Chief executive officer Mr Manfred Mahari told the company’s shareholders this afternoon that the develop-ment had been necessitated mainly by a lack of afforda-ble mortgages on the local market.

“Given the persistent liquid-ity challenges and lack of

affordable mortgage, we are actively considering alter-

native options for realising value on the Hazeldene land-

bank in the short-term,” he said, adding that the value of the options will be weighed against already existent plans.

“These options will be assessed against the long held housing development plan for which we have already obtained a permit.”

The mortgaging sector in the country is facing the key challenge of lack of long-term mortgage finance, which has resulted in the few available mortgages becom-ing very expensive.

In respect of the group’s other property development, the CEO said they expect the OK Houghton Park project

News Update as @ 1530 hours, Thursday 25 February 2016

Feedback: [email protected]: [email protected]

Mashonaland re-considers Hazeldene plans

2 NEws

to be completed early in the second half of this year.

“We remain on target to completing the OK Houghton Park project by end of July 2016. The entry yield for this project is 6 percent.

“Additionally, completion of the project will free up the space being let to OK for further strategic re-letting,” he said.

A trading update to the company’s shareholders showed a dip in revenue both compared to prior compara-ble period last year and in the context of current budget

targets as economic activity remains subdued in the local economy.

“Revenue at $1,9 million was 7 percent below last year ($2,1 million) and 2 percent below budget. The decline was due to falling occupancy levels and downward rent reviews,” said Mr Mahari.

Over the past few years rent reductions have been gener-ally high on the local prop-erty market as property own-ers have tended to concede in order to keep properties occupied.

However the CEO said “strat-

egies are in place to ensure that we attract any new qual-ity tenants on the market.”

For Mashonaland Holdings, since the fourth quarter of last year voids have remained largely stable at 26 732 square metres, repre-senting 25 percent of the lettable portfolio.

The company’s property expenses at $493 669 were 1 percent up from last year and 11 percent above the current budget of $445 992.

According to management the key drivers of these expenses were mainly voids

related costs (at 40 percent), provision of credit losses (23 percent) and property man-agement costs (23 percent).

Administration expenses at $0,7 million were 3 per-cent above same period last year and 17 percent above budget.

And operating profit at $0,8 million was 19 percent below both the comparable period last year and current budget, although management is confident that its revenue growth and cost containment strategies are set to improve the operating profit.●

BH243

By Funny Hudzerema

HARARE – State-owned Zimpost is targeting 25 percent growth in business this year after introducing an advanced system of sending mail to replace the tradi-tional one of using stamps.

The new system which was introduced by Zimpost is a partnership with EasiMail called Remote Meter System uses the Franking Machine which is reset within seconds using LAN thereby eliminat-ing the need for clients to queue at the post office to buy stamps.

All mail and parcels will be processed from the custom-er's office without going to the post office. Zimpost acting managing director Mr Joel Katsande said the new system is a substitute of the traditional methods of send-ing parcels which has been on a decline during the past decades due to improvement

in technology.

“We stil l feel that in 2016 we can achieve about 20 to 25 percent growth in business because there are other initi-atives that we are putting in place outside the mail busi-ness, we are now focusing on agent business and financial services. With these initia-tives we are confident that we can achieve our target growth.

“Globally the mail business was losing customers and we have seen that there is need to introduce other initia-tives to boost the sector but currently the mail business is contributing 20 to 25 percent to turnover,” he said.

EasiMail will sell the Frank-ing machine for Remote Meter System to customers while Zimpost will be paid by customers to send their products.

An EasiMail franking machine can be used for all types of mail- normal mail, registered mail, expedited mail, air-mail, and with additional or optional weigh platform the applicable rates will also be calculated automatically.

The migration of Zimpost from mechanical franking machines to Remote Meter Setting system eliminates postage fraud and increases revenue security, therefore benefiting both Zimpost and

their customers in numerous value added ways.

Officially launching the product Deputy Minister of Information Communication, Postal and Courier Services Dr Win Mlambo said the part-nership between Zimpost and EasiMail will assist to boost Zimpost.

“This partnership ladies and gentleman, helps Zimpost add value to a product that was on the decline. However this has been overtaken by technological developments and there was need for Zimpost to react in tandem to these developments if the company wanted to remain afloat,” he said.

He added that it has been noted that on average values between 18-20 percent of increased revenue have been realised by postal authori-ties who introduced a similar remote meter setting sys-tem. ●

4 NEws

Zimpost eyes 25pc growth

BH245

By Rutendo Rori

HARARE – Zimbabwe has launched the local chap-ter of the Federation of the National Associations of Women in Business (FEM-COM), which is expected to link Zimbabwean business women to markets in the Eastern and Southern African region.

FEMCOM is a legal entity of the Common Market for Eastern and Southern Africa (Comesa) regional bloc.

Speaking at the launch FEM-COM Secretariat executive director Ms Katherine Ichoya said FEMCOM members should take advantage of the Memoranda of Understanding (MOU’s) which the Com-mon Market for Eastern and Southern Africa (COMESA) engaged in.

“COMESA signed Memoranda of Understanding between the Indian, Turkey, and

Australian governments. We have to take advantage of these MOU’s our father COMESA engaged in.

“We need to ensure that we categorise ourselves in sectors where our passion is. We want to make sure that Zimbabwe is raising the flag of FEMCOM high,” said Ms Ichoya. Women Affairs, Gen-der and Community Develop-ment Minister Nyasha Chik-

winya said the Zimbabwean Chapter of FEMCOM will help Zimbabwean business women to enhance their trade activi-ties in the region.

“We want this launch to be a window of opportunities by linking women to markets in the Eastern and Southern region so that this robust program becomes a sustain-able reality. Our women are already organized in the sec-

tors of agriculture, fisheries, tourism, industry, services, mining, transport and energy and they are rearing to go,” she said.

“It is my sincere hope that as we continue this invig-orating journey together, we will see more women involved in exports and therefore an increase in the country’s Gross Domestic Product.” ●

6 NEws

Ms Katherine Ichoya

Comesa launches FEMCOM Chapter in Zim

BH247

BH248

HARARE - Cable manufac-turer, Cafca said on Wednes-day it will report a massive drop in profitability for the half-year ended March this year compared to the same period last year on the back of low sales in both the domestic and export markets.

In a profit warning statement, the company said its turno-ver is anticipated to slide 30 percent, hitting on its basic and headline earnings per share, which are expected to slump about 75 percent to 0,6 cents from 2,59 cents in the previous reporting period.

“Profitability has been adversely affected by the anticipated 30 percent drop in turnover from both a drop in local sales due to lack of liquidity in the market and a drop in export sales due to foreign exchange shortages and devaluation in our pri-mary export market curren-cies to the United States dol-lar,” said the Honour Mkushi

chaired Cafca board.

Cafca predominantly exports to South Africa but also had Zambia and Mozambique as target markets.

In the prior period end-ing March last year, Cafca recorded a 41 percent surge in revenue to $14 million

driven by improved local sales and exports. Volumes grew by 72 percent but contribution to revenue was restricted by poor prices on both the local and export markets.

The latest profit warning was in line with Johannesburg Stock Exchange listing rules

which require that firms to update the market when there was a “reasonable degree of certainty” that financial per-formance would be at least 20 percent below the previous corresponding period. Cafca is also listed on the Zimba-bwe Stock Exchange.- New Ziana.●

9 NEws

Cafca warns of profit slump

BH2410

HARARE - The mainstream industrial index recovered 0.13 to close at 99.33 after yester-day’s blip that had halted two consecutive gains.

Giant telecoms Econet Wireless was up $0,0077 to trade at $0,2279 and beverages pro-

ducer Delta gained $0,0025 to close at $0,5325.

On the downside, tobacco giant BAT led the shakers with a $0,0621 loss to settle at $11,4379, while Colcom lost $0,0150 to trade at $0,1450 and Innscor was $0,0055 lower

at $0,1840.

The mining index was flat at 18.74 points as Bindura, Fal-gold, Hwange and RioZim again maintained previous price levels at $0,0090, $0,0050, $0,0300 and $0,1040 respectively - BH24 Reporter ●

ZsE11

Equities in quick bounce back

BH2412

MOvERs CHANGE TOdAy PRiCE UsC sHAKERs CHANGE TOdAy PRiCE UsC

Econet 3.49 22.79 COLCOM -9.37 14.50

DELTA 0.47 53.25 INNSCOR -2.90 18.40

TRUWORTHS -1.23 0.80

BAT -0.54 1,143.79

iNdEx PREviOUs TOdAy MOvE CHANGE

INDUSTRIAL 99.20 99.33 +0.13 poinTs +0.13%

MINING 18.74 18.74 +0.00 POINTS +0.00%

13 ZsE TABlEs

ZsE

iNdiCEs

stock Exchange

Previous

02 03

ADD TO CARTSave big on selected

Products of your choice

PAYMENTYou can purchase

whenever, wherever using:

DELIVERYSpend $30 or moreon your purchases

and get freedelivery

01 Hello Convenience

www.hammerandtongues.com

BIG CONVENIENCE+BIG SAVINGS+BIG OPPORTUNITIES = BIG HAPPINESS

SHOP ONLINE!!

today

BH2414

BH2415

16 diARy OF EvENTs

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

POwER GENERATiON sTATs

Gen Station

25 February 2016

Energy

(Megawatts)

Hwange 271 MW

Kariba 285 MW

Harare 30 MW

Munyati 30 MW

Bulawayo 22 MW

Imports 0 - 300 MW

Total 1003 Mw

25 February 2016 - Extraordinary General Meeting (“EGM”) of the shareholders of Radar Holdings limited; Place: Tanganyika House, 6th Floor Boardroom, Harare; Time: 0900 hours...

25 February 2016 - The 49th Annual General Meeting of Mashonaland Holdings limited; Place: The Boardroom, 19th Floor, ZB life Towers, 77 Jason Moyo Avenue, Harare; Time: 1200 hours...

26 February 2016 - The sixty-ninth Annual General Meeting of Ariston Holdings limited; Place: Ariston Holdings limited Main Boardroom, 306 Hillside Road, Msasa woodlands, Harare: Time: 14.30 hours:

THE BH24 diARy

BH2417

JOHANNEsBURG - South Africa's rand weakened today after a budget speech by the finance minister that failed to convince investors the country was on track to turn around its bleak growth prospects.

Stocks were set to open higher at 0700 GMT, with the JSE securities exchange's Top-40 futures index up 0,8 percent.

At 0645 GMT, the rand had slipped 0,22 percent to 15,6295 per dollar, a one-week trough wiping out the unit's recent rally to a two-month high.

Bonds regained recent momentum, with the yield on the benchmark paper due in 2026 down 10.5 basis points to 9,27 percent.

"What was obvious was that Pravin Gordhan had no abil-ity to announce wider micro-economic structural reforms that will boost growth in the medium run and bring back investor confidence," emerging markets analyst at Nomura Peter Attard Mon-talto said.

Early yesterday, Finance Min-ister Gordhan told a confer-ence that the treasury would impose more spending cuts if economic growth remained below 1 percent in the next two years.

Gordhan announced a pack-age of spending cuts, public sector job freezes and mod-erate tax hikes on property sales, fuel and alcohol on Wednesday in a speech to convince investors and rat-ings agencies that the gov-ernment could cut spending

and boost growth.

But markets reacted adversely, with the currency tumbling more than 3 per-cent and bond yields spiking in the immediate aftermath.

"We never expected that the budget would be good enough to avoid a downgrade to junk. However, the gov-ernment has perhaps bought some time," said currency analyst at Rand Merchant Bank John Cairns- Reuters●

REGiONAl NEws 18

Rand on the backfoot after budget disappoints

BH2419

Oil declined as expanding US crude inventories kept supplies at the highest level in more than eight decades.

Futures lost as much as 1,6 percent, erasing a 0,9 percent gain Wednesday. Stockpiles increased for a second week to 507,6 million barrels, the most since 1930, according to an Energy Information Admin-istration report. Prices won’t recover until the second half of next year at the earliest, Mexican Energy Minister Pedro Joaquin Coldwell said at a con-ference in Houston, estimating that the market is oversup-plied by about 2 million bar-rels a day.

“Any rally is going to be sub-dued primarily because of the large inventory levels,” David Lennox, an analyst at Fat Prophets in Sydney, said by phone. “We expect the volatil-ity to ease, but the risks are still to the downside.”

Oil is down about 14 percent this year on speculation a global glut will be prolonged amid brimming US stockpiles and the outlook for increased exports from Iran after the

removal of international sanctions. US driller Continen-tal Resources Inc. halted all fracking in the Bakken shale region after posting its first annual loss since the compa-ny’s public debut in 2007.

West Texas Intermediate for

April delivery fell as much as 52 cents to $31,63 a barrel on the New York Mercantile Exchange and was at $31,71 at 8:11 a.m. London time. The contract rose 28 cents to $32,15 Wednesday. Total volume traded was about 50 percent above the 100-day

average.

U.s. supplies

Brent for April settlement lost as much as 56 cents, or 1,6 percent, to $33,85 a barrel on the London-based ICE Futures Europe exchange. The con-tract advanced $1,14, or 3,4 percent, to $34,41 on Wednes-day. The European benchmark crude was at a premium of $2,21 to WTI.

* U.S. crude stockpiles expanded by 3,5 million barrels through Feb. 19, while supplies at the nation’s biggest oil-storage hub rose for a fourth week to a record 65,1 million barrels compared with a working capacity of 73 million.

* Production declined for a fifth week to 9,1 million bar-rels a day; gasoline inven-tories dropped 2,2 million barrels from the highest level since January 1990.

* Mexico is willing to partici-pate in a meeting with global producers to discuss a poten-tial output freeze, Minister Coldwell said.-Bloomberg●

iNTERNATiONAl NEws 20

Oil declines as Us crude stockpiles expand further amid glut

BH2421

By Chris vermeulen

*Africa’s internal trade deals look good on paper. A pity that they are rarely followed

Two of the largest regional trade accords in history were agreed last year. The Trans-Pacific Partnership involves 12 countries in Asia and the Americas, and was the subject of headlines and heated debate. But most people have never heard of the Tripartite Free Trade Area (TFTA), which covers 26 Afri-can countries. It will create the biggest free-trade area on the continent, “from Cairo to the Cape”, as its supporters boast.

Many in the developing world see trade as rigged in favour of rich countries. But African regional integration is all the rage. The continent features 17 trade blocs. The TFTA aims to join up three of them: the East African Community (EAC), the Southern African Development Community (SADC) and the Common

Market for Eastern and South-ern Africa (COMESA). At a conference on African busi-ness on February 20th-21st in the Egyptian resort of Sharm el-Sheikh, several leaders called for a united African market.

An abundance of borders has long separated the continent’s

54 countries, limiting econo-mies of scale. Fixing common problems such as a shortage of roads takes teamwork—and in turn should lead to more integration. Average trans-port costs in Africa are twice the world average and are thought to harm trade on the continent more than tariffs and other barriers.

A shame, then, that regional economic deals are often poorly implemented. An Afri-can firm selling goods on the continent still faces an aver-age protection rate of 8,7 per-cent, compared to 2,5 percent overseas, according to the UN Conference on Trade and Development (UNCTAD). That is one reason why intra-Af-rican trade as a percentage of total African trade, though increasing, is well below what is seen in other poor regions.

Nearly all African countries are party to more than one regional agreement. The overlapping allegiances can tie them in knots. Members of COMESA, for example, must impose a common external tariff on goods of non-mem-bers. But several members are also in the SADC free-trade area, which requires lower tariffs on goods from some non-COMESA states. The TFTA is meant to iron out these differences, but the details are still to be decided.

African countries vary in size,

22 analysis22 ANAlysis

Tear down Africa's trade walls

23 analysis23 ANAlysis

geography and resources, so trade deals affect each differ-ently. Manufacturing tends to cluster in big countries such as Kenya, Nigeria and South Africa. Small agricultural producers fear being swamped with food from larger neigh-bours. There are no mecha-nisms for helping the losers. So it is difficult to convince countries to make sacrifices in order to increase trade.

Whether to protect their dominance or avoid hard-ship, most countries revert to protectionism. Take the Economic Community of West African States (ECOWAS). It is meant to be a customs union, but has an extensive list of exceptions. Two decades after it promised free movement of people, goods and transport, implementation is weak. East Africa does better, but Karim Sadek, the director of Rift Valley Railways in Kenya and Uganda, says that what would make his life easier would be not having to stop at the border. “You get used to the inefficiencies.”

Non-tariff barriers are not only an African problem. Product standards and rules of origin are used by America to block Mexican goods under NAFTA. But evidence cited by UNCTAD suggests that the reduction of tariffs in Africa has led to an increase in the use of other obstacles. In SADC such protectionism has resulted in more imports from non-SADC countries. Clothes, for example, are required to be both manufactured and sourced in SADC countries to qualify for preferences. Since few textiles are produced in the region, the rules have stifled trade in garments.

Bureaucracy is expen-sive to overcome. Accord-ing to research by Nick Charalambides of Imani Development, a consultancy, Shoprite, a South African retailer, spent $5,8m deal-ing with red tape in 2009 in order to gain $13,6m in duty savings under SADC. Others avoid the hassle of customs: informal trade is thought to provide income to over 40

percent of Africa’s population.

Some think Africa needs to approach trade differently. “The first question that should be asked is: what can we trade with each other?” says Bineswaree Bolaky of UNC-TAD. Often the answer is: not much. Most African countries produce a narrow range of goods and have export sectors geared towards supplying rich countries. Few have signif-icant manufacturing bases and, unlike in developing Asian countries, there is little trade in inputs or services that might lead to African chains of production.

The volume of intra-African trade is so small that fixing these problems, and upgrad-ing the continent’s infrastruc-ture, may not seem worth the expense to some countries. So UNCTAD recommends creating an integration fund, financed by relatively rich African states, to pave new roads and build export capacity in poorer countries. The African Development Bank handed out

over $1 billion in the past two years with the explicit aim of boosting intra-African trade. But that risks becoming an objective in and of itself. “You still need to be flogging stuff to big countries,” says Alan Winters of the University of Sussex.

In their zeal to integrate, African leaders may also be using the wrong model. Broad and shallow agreements are the norm, but the continent’s most successful economic bloc consists of just five countries. EAC members keep good data, and a public scorecard holds them accountable for non-tar-iff barriers.

“There you have a small group of countries that is taking it seriously and making some progress,” says Jaime de Melo of the University of Geneva. Talk of a common currency in East Africa and even a polit-ical federation do not seem far-fetched. It is a stretch to think that the TFTA will lead to anything similar. – The Economist●