News Update as @ 1530 hours, Thursday 26 June 2014Feedback: bh24admin@zimpapers.co.zwEmail: bh24feedback@zimpapers.co.zw

By Tawanda Musarurwa

• ...as group submits comprehen-sive re-capitalisation plan to the Reserve Bank of Zimbabwe

FBC Holdings has adjusted its plans to meet the Reserve Bank of Zimbabwe's $100 million capitalisation require-ments and will no longer merge FBC Bank and FBC Building Society. Chief

executive John Mushayavanhu told the company's AGM this afternoon that the group has since submitted its re-cap-italisation plan to the central bank to meet the $100 million capital require-ment for commercial banks.

The group has also submitted a sep-arate re-capitalisation plan for FBC Building Society, with building societies supposed to meet a capital require-ment of $80 million.

"We have submitted our re-capital-isation plan to the RBZ .....basically the bank is going to trade its way into complying with the $100 million capital requirement, and the building society will also trade its way into compliance with the $80 million capital require-ment by 2020. "If we can grow our profit after tax by 5 percent each year between now and 2020, the numbers

given by auditors show that we can meet the capital requirements," said Mushayavanhu. Mushayavanhu said if this projected growth is not achieved, they could still utilise dividends from the group's other subsidiaries to re-capitalise the bank and the building society. As a last resort, the group could possibly sell under-performing subsidi-ary, Turnall Holdings, added Mushaya-vanhu. "And by the way I don't even need to talk about selling Turnall, but if the need arises to sell Turnall to meet those numbers."

Meanwhile, giving a trading update on the performance of the group in the year to end of last month, Mushaya-vanhu highlighted that FBC Bank's profitability of the unit is ahead of the budget and that achieved in the same period last year. The bank's loan book has gone down by 10 percent com-

pared to the audited position as at 31 December 2013. Deposits and lines of credit have increased by 6%.

"As we speak we have a US$60 million three-year facility from Afreximbank that has been approved and we are awaiting final sign off by the 30th of June which will bring in an additional US$20 million as the US$40 million has already been drawn down," he said.

The building society’s performance is currently in line with their set budget and ahead of that experienced in prior year with a contribution of 46 percent to the Groups overall profit before tax.Turnall's performance so far has been below budget, although management expects a turnaround in fortunes by year-end. The AGM also saw the com-pany's shareholders approving all the proposed resolutions. •

FBC Holdings dumps bank-building society merger

Mr Mushayavanhu

BH24

By Rumbidzayi Zinyuke

Construction firm Masimba Holdings says its business has been affected by the deteriorating trading environment as well as competition from Chinese

contractors that win construction ten-ders.

Giving a trading update at the com-pany’s AGM today, chief executive Canada Malunga said most local con-

tractors were not benefitting from the ZimAsset initiative of beneficiation and local empowerment as Chinese had taken over the construction industry.

“We are in an industry that is domi-nated by Chinese contractors that have been developing over a number of years. While we appreciate the work done, Chinese investment has come at a huge cost to the local contracting capacity.

“We therefore encourage Government to urge the Chinese contractors to work with local contractors so that we pre-serve and rebuild local contracting and engineering capacity,” he said.

Malunga said the group’s turnover for the five months to May 2014 was run-ning 25 percent below the prior year

following a 33 percent dip in Construc-tion turnover. The company’s plastics division, Proplastics, traded flat on 2013.

“The gross profit margins at both Con-struction and Proplastics held at 2013 levels but the impact of the dollar turn-over on the topline has reduced the EBITDA levels. Consequently, we are on a negative EBITDA of $127 000 compared to a negative of $263 000 last year,” he said.

The company’s operating overheads for the period are down 18 percent on 2013. Malunga said the active order book stood at $23 million while the inactive order book was at $19 million. He said discussions on resuscitating the inactive order book were underway and works on the main infrastructure projects would resume before the end of the year.

“Proplastics performance to December will be steady and buoyed by the local water and sanitation projects together with improved presence in the region,” he said. He said the new plastics plant which will be commissioned in August would also contribute to cash flows in the fourth quarter. •

3 NEWS

Masimba turnover dips as Chinese competition weighs

BH24

5 NEWS

The Zimbabwe Government on Thurs-day denied reports that it is in the pro-cess of amending the Indigenisation and Empowerment Act.

Recent media reports indicated that the Government was in the process of reviewing the indigenisation and empowerment policy to facilitate sec-tor-specific implementation.

The Production Sharing Model (PSM) and the Joint Empowerment Invest-ment Model (JEIM) were reported to have been identified as the principal mediums through which the indige-nization policy would now be imple-mented. PSM is a broad cover for an assortment of production sharing

agreements signed between gov-ernments and extraction companies concerning how much of a resource extracted from the country each will receive.

Under this model, Zimbabweans would retain 100 percent ownership of min-eral resources and agricultural land.

Investors would be allowed to recoup their initial capital investment, an appropriate return on investment and operational costs before the sharing of production outputs or profits. Under the JEIM, outside mining, agriculture and particular tourism investments, locals would be encouraged to enter into joint ventures as a way of gen-

erating capital to build wholly Zim-babwean-owned enterprises. Youth, Indigenization and Economic Empow-erment Minister Francis Nhema told the Parliamentary Portfolio Committee on Indigenization and Empowerment that although there had been debate in Cabinet about the issue, no concrete position had been reached yet. “I never said I want to amend the indigenisa-tion law. If we decide that there should be something done to the law we shall make an announcement,” he said.

“It is a matter that has come under discussion in Cabinet, we have peo-ple bringing in ideas but we have not reached a stage where we agree that we should amend. Right now we have not agreed on any amendments.”

Nhema was responding to a question from Mkoba MP Amos Chibaya who wanted to know when the amend-ments would come into force.

The Indigenisation and Empowerment Act, which was introduced in 2008, requires all foreign owned businesses operating in Zimbabwe to sell 51 per-cent equity to locals. ― New Ziana •

Zim not reviewing Indigenisation Act

Minister Nhema

AdM-DI156506-

BH24

7 NEWS

Fidelity Life expects long-term gloomy share value

By Lynn Murahwa

Fidelity Life Assurance of Zimbabwe foresees little improvement in the value of their shares within the foreseeable future but remain hopeful of a better performance than last year.

Fidelity Life managing director Simon Chapereka told the company's AGM this afternoon that the company does not see the possibility of much improvement in the value of their shares although they remain hopeful that the company will put in a better performance than that of last year.

According to Chapereka currently the company is one of the 67 nega-tive counters on the Zimbabwe Stock Exchange. “We do not expect any major improvement in terms of the

equities but we believe we are confi-dent as management that business will be able to post gains and improvement on last year’s performance.

“Investment and realized income is trading at the same rate as last year but with the unrealized income on equities we have a major challenge that cur-rently we are one of the 67 counters on the Zimbabwe Stock Exchange (ZSE) that are in the negative” he said. Fidel-ity Life recorded a 15 percent trading loss compared to last year attributed to the divergent of funds to sustain the South View projects.

“On fee income we are trading 15 percent below prior year mainly as a result of the review of interest rates in terms of the deposit rates of the asset management and the micro lending business. We have taken a substantial amount of those businesses as a result of the need to redeploy the invest-ments to fund the South View develop-ment project” said Chapereka.

He added that the company has per-formed profitably despite the liquidity strains recording a growth of 27 per-cent from last year till May this year. “The company has continued to trade

profitably in 2014 albeit the challenges relating to liquidity and the tight mac-ro-economic operating environment but I'm pleased to say in terms of the company it has been able to do well. In terms of individual life we managed to post a growth of 27 percent on last year up to the end of May and funeral assurance, we managed to cost 13 percent above prior year and in terms of group business we managed to cost 3 percent above prior year.” Fidelity Life Chairman Solomon Tembo said the liquidity strains posed a challenge as they affected the uptake of their prod-ucts.

“The liquidity challenges affected the uptake of traditional insurance prod-ucts, the depressed economic activity saw a number of companies closing shop while those remaining open struggled to operate profitably. As a result premium collection for pensions, employed benefits and individual life products remained a challenge” he said. He added that the company tak-ing necessary measures to ensure its survival. “The group is undertaking various initiatives to unlock value and to ensure company survival in these very difficult and trying times” said Tembo •

Mr Chapereka

BH24

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BH24

The equities market further declined today, going down 0.64 percent after bucking a prolonged bullish trend yes-terday.

The industrial index went down 1.22 points to close at 188.37 points largely

weighed down by profit-taking in heav-yweight Econet.

The giant telecoms firm retreated 3 cents to trade at 70 cents. Also down 3 cents were heavyweights Lafarge and PPC, which traded at 62 cents and 227

cents respectively. TSL lost 2 cents to close at 28 cents and Meikles eased 1.80 cents to 20.10 cents.

On a positive note, Old Mutual added 1.90 cents to close at 262 cents. Other gains were in RTG which was up 0.10 cents to settle at 1.2 cents, Dawn and Mash increased 0.01 cents each to close at a cent and 2.41 cents respec-tively.

Volumes remained thin, resulting in a value of trades of $437K,

The mining index rose 0.39 points (or 0.64 percent) to close at 61.71 points after Riozim had a firm bid at 21 cents. Bindura, Falgold and Hwange main-tained previous trading levels.

— BH24 Reporter •

10 ZSE REVIEW

Equities in second day loses

Zimbabwe needs an effective State Procurement Board considering the important role that it plays in eco-nomic development.

Considering the problems that have emerged in recent times, there may be need for a restructuring of sorts.

Firstly there is the very recent instance of the cancellation of the Hwange Power Station expansion project tender which had been awarded to China Machinery and Engineering Company (CMEC).

This clearly points to problems, or at least 'inefficiencies' in the tender process somewhere.

For how can a company whose bid was properly assessed fail to initiate a project in over eight months after the tender was awarded?

Did the SPB, in carrying out due dili-gence on the company fail to assess its financial position or ability to carry out the project?

What is the point of the due dili-gence then, when such a vital ele-ment of any project is ignored or missed?

There have been numerous cases where the SPB has awarded tenders to undeserving companies at the expense of those believed to have a traceable record.

And that usually points to one thing....corruption.

Zimbabwe's procurement law clearly tries to negate corruption in public procurement.

The State Procurement Act (SPB) (Chapter 22:14) is modeled along the United Nations Commission on International Trade Law on Procure-ment of Goods and Construction and seeks to regulate public sec-tor procurement and protect public funds. It therefore compliments the UN Global Compact’s 10 principles,

the anti-corruption principle stat-ing businesses should work against corruption in all its forms, including extortion and bribery.

It is therefore sad that although on paper, the law is clear, but on imple-mentation the process is a mess.

Although it is not recommended, one can understand NetOne chief executive Reward Kangai's request to be recused from using the State Procurement Board (SPB) for ten-ders.

This was after - Kangai claims - the SPB made them procure “use-less” equipment from Siemens and Motorola. Parastatals and public companies are key to the economic growth of the country.

We are not blaming the SPB for our current electricity shortages, but no one can deny that Zimbabweans will have to wait a little longer to see an improvement in the supply of elec-tricity.

The Hwange expansion project is targeted to add 600 mega-watts onto the national grid.

But it has been over eight months since CMEC won that tender and not a finger has been lifted in terms of that project.

We do not know what NetOne needed that 'equipment' for, but we can guess it would have improved Zimbabwe's telecommunications sector. Government needs to take a peek into the bungling board. •

11 BH24 COMMENT

Someone needs to look into SPB

BH24

Namibia plans to tap interest gener-ated by its debut Eurobond almost three years ago when it sells debt in the South African market late this year or early in 2015 to help finance the country’s budget deficit.

The government will use the Johan-nesburg Stock Exchange’s listed bond programme, Finance Minister Saara Kuugongelwa-Amadhila said in an interview yesterday in the capital, Windhoek.

The size of the bond depends on Namibia’s “cash flow requirements”

and market conditions, she said.

Namibia, the world’s biggest offshore diamond miner and fifth-largest ura-nium producer, projects its deficit

to narrow to 5.4 percent of gross domestic product in the year through March, from 6.4 percent in the previ-ous 12 months. The government will build on interest shown in its Octo-ber 2011 $500 million Eurobond, the minister said.

That bond was more than five times oversubscribed, the southwest Afri-can nation’s central bank said at the time.

“The response on the international bond was very positive,” Kuugongel-wa-Amadhila said. “The margins were quite good given that it was our first time going onto the market.”

The minister said the government still planned to raise 80 percent of its debt in the domestic market by issuing

treasury bills and other bonds, with the remainder coming from foreign borrowing. The government plans to cut the budget deficit to 3.5 per-cent over the next three years, while its debt will climb 27 percent to 38.5 billion Namibian dollars ($3.64 billion) next year, Kuugongelwa-Amadhila said in February.

The country’s GDP is forecast to grow 4.3 percent this year, according to the International Monetary Fund.

“The fact that Namibia is now better known on the market with more sta-ble market conditions, sound growth projections and the fiscal reforms we are undertaking, means we will get a much better response this time around,” Kuugongelwa-Amadhila said. ― Bloomberg •

13 REGIONAL NEWS

Namibia to sell bond in South African market to fund budget gap

enjoy the CAIO ride!

14 DIARY OF EVENTS

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

POWER GENERATION STATSGen Station

26 June 2014

Energy

(Megawatts)

Hwange 493 MW

Kariba 750 MW

Harare 45 MW

Munyati 31 MW

Bulawayo -- MW

Imports 120 MW

Total 1439 MW

26 June - Pioneer 44th Annual General Meeting of Sharehold-ers, Venue: Pioneer Corporation Africa Limited Boardroom, Corner Hood/Hermes Roads, Southerton, Harare, Time: 10:00 hrs

26 June - Masimba Holdings Limited Thirty-Ninth Annual General Meeting of Mem-bers for the period ended 31 December 2013, Place: 44 Til-

bury Road, Willowvale, Harare, Zimbabwe, Time: 12:00

30 June - TA Holdings 79th Annual General Meeting of the ordinary members Venue: Miti Room, Sango Conference Centre, Cresta Lodge, Harare, Time: 1400 hours

30 June - ZIMRE 16th Annual General Meeting of members, Venue: NICOZDIAMOND Audito-rium, 7th Floor Insurance Centre, 30 Samora Machel Avenue, Time: 1230 hours

THE BH24 DIARY

BH24

16 ZSE

ZSEMOvERS CHANGE TODAY PRICE USC SHAKERS CHANGE TODAY PRICE USC

RTG 9.09% 1.20 GB -16.66% 0.05

DAWN 1.01% 1.00 MEIKLES -8.21% 20.10

OLD MUTUAL 0.73% 262.00 TSL -6.66% 28.00

MASH 0.41% 2.41 LARFARGE -4.61% 62.00

ECONET -4.10% 70.00

PPC -1.30% 227.00

IndicesINDEx PREvIOUS TODAY MOvE CHANGE

INDUSTRIAL 189.59 188.37 -1.22 POINTS -0.64%

MINING 61.32 61.71 +0.39 POINTS +0.64%

Stocks Exchange

BH24

18 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 2,356.80 +2.31 +0.10% 20June

Kenya 4,825.52 +28.10 +0.59% 20June

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 41,129.29 +60.36 +0.15% 20June

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 187.40 +2.54 +1.37% 20June

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 —"Our business in life is nOt tO get ahead Of Others, but tO get ahead Of Ourselves."― Zig Ziglar

Globalshareholder.com

BH24

Ukraine will become an associate member of the European Union on June 27, President Petr Poroshenko said at a meeting with representatives of local self-government bodies and other state authorities on Wednesday.

"Ukraine will become a full-fledged EU associate member in the presence of leaders of the EU states in Brussels on June 27," Poroshenko said.

The Ukrainian president will visit Brus-sels where he will sign an economic part of Ukraine’s association treaty with the EU, presidential press service said.

European Commissioner for Enlarge-ment and European Neighbourhood Policy Stefan Fule visited Kiev on June 19-20 to continue preparations for signing the economic part of the Asso-ciation Agreement between the Euro-pean Union and Ukraine.

The Association Agreement is to be signed in Brussels on June 27. Ukrain-ian leaders will not attend the upcom-ing EU summit, which is not open to third countries. But they will be invited to a separate signing ceremony where

the EU will sign the Association Agree-ments with Moldova and Georgia.

In April, Ukraine signed the political part of the agreement with the EU, which makes up about 2 percent of the doc-ument. The remaining 98 percent deal with the creation of a free trade zone between the EU and Ukraine, which will basically mean the opening up of the Ukrainian market to European goods since Ukrainian industrial commodities

cannot compete on European markets: there is no demand for the defense industry’s products as EU countries are adopting NATO standards, and agricultural produce can hardly make their way to the saturated European market where even EU countries have to observe production quotas, TASS reports.

Ukrainian Prime Minister Arseniy Yat-senyuk has voiced readiness for consul-

tations with Russia to discuss problems arising from Ukraine's euro-integration.

Moscow has repeatedly expressed con-cern over Ukraine's plans to sign the economic part of an association agree-ment with the European Union, fearing uncontrolled flows of goods to Russia and vowing to protect its domestic markets if that happens. ― voiceof-Russia •

20 INTERNATIONAL NEWS

Ukraine's association agreement with EU to be signed on June 27 - Poroshenko

An opportunity has arisen to enable HelpAge Zimbabwe to facilitate the implementation of the Rural WASH project, to improve water, sanitation and hygiene in Bubi District

1. Carry out an assessment of the WASH related health risks and needs within - General Bookkeeping- Cash book and petty cash management the targeted population and make recommendations for actions which are - Order and control office stationery consistent with agreed guidelines and protocols. - Liaise with project staff in procurement and maintenance of project stocks

2. In conjunction with the local authority and relevant government departments records make recommendations regarding HelpAge Zimbabwe response to unmet - Preparation of Donor Financial reports needs. - Bank reconciliations

3. Facilitate the implementation of SafPHHE in conjunction with the WASH - Filing all office documentsofficer and/or other stakeholders. - Financial and programmes reports, vouchers, program and office meetings

4. Involve affected populations in assessment of the situation and in planning minutes activities and the design of water and sanitation facilities. - Monitoring and securing adherence to organization and donor administrative

5. Identification and training of ward based SafPHHE facilitators and health club processes facilitators. - General Office Administration

6. Write regular reports adhering to HelpAge Zimbabwe and donor reporting

formats as required.

- Degree in Accounting or equivalency and/or accounting

- Computer knowledge 1. Degree in Environmental Science or other relevant qualification

- Knowledge in Pastel/accounting package 2. Knowledge of public health and one or more other relevant areas (e.g. health

- Skills to manage own work and meet deadlines promotion, community development, education, community water supply).

- Clean Class 4 driver's licence 3. The post holder should have at least two years` practical experience in

appropriate community health programmes. 4. Experience and understanding of community mobilisation in relation to water

Send CV and an application letter to info@helpage.co.zwand sanitation activities. Deadline for application 30th June, 2014.5. Sensitivity to the needs and priorities of disadvantaged populations.

6. Demonstrated experience of integrating gender and diversity issues into public health promotion.

7. Good oral and written reporting skills. 8. Good communication skills and ability to work well in a team. 9. Ability to work well under pressure and in response to changing needs. 10. Ability to travel at short notice and to work under difficult circumstances 11. Good written and spoken English and Ndebele are essential.

2. Vacancy: Administration Assistant

Station: Bubi District

Key Result Areas Job Description

Qualifications and Person Specification

SKILLS AND COMPETENCIES

To Apply

- 2 years` experience in office administration

1. Vacancy: Participatory Health and Hygiene Education Officer

TLM-DI

159207

-T26

Two vacancies have arisen in HelpAge Zimbabwe.

BH24

By Carlos Lopes

Ever since the high tech generic drug production facility, Cinpharm-Came-roon, was set up, it is relatively easier for Cameroonians to have access to medicines.

Now a low wage earner can access a course of antibiotics at a lower price than a Kenyan counterpart. According to the World Health Organization a 7-day course of treatment with cipro-floxacin could cost in Kenya close to a month’s wages. Unfortunately, this sce-nario is not uncommon across Africa.

In Uganda, it could cost about 11 days of a household income to purchase a single course of artemisinin-combina-tion therapy used to treat malaria for an under five-year-old child.

Africa carries 25% of the world’s dis-ease burden but consumes less than 1% of global health expenditure. It manufactures less than 2% of the medicines it consumes.

Over 70% of the world’s HIV/Aids cases and 90% of the deaths due to malaria currently occur in Africa. In addition, the continent bears 50% of

the global deaths of under five chil-dren mainly due to neonatal causes as well as pneumonia, diarrhoea, mea-sles, HIV, tuberculosis and malaria. The tragedy is that these diseases are treatable: most related deaths could be prevented with timely access to appro-priate and affordable medicines.

Africa’s capacity for pharmaceutical research and design (R&D) and local drug production is amongst the lowest in the world. The problem of inade-quate investments in this area, unfor-tunately, continues.

Overall, thirty seven African countries have some pharmaceutical production, although only South Africa produces some active pharmaceutical ingredi-ents. Where there is local production in Africa, normally there is a reliance on imported active ingredients.

As a result, the supply of African phar-maceuticals remains highly dependent on foreign funding and imports. The pharmaceutical market in Africa is now 70% imported. According to trade data, India alone accounted for 17.7% of African pharmaceutical imports in 2011. Estimates further suggest that more than 80% of antiretroviral drugs (ARVs) across the continent are imported.

The poor access and affordability of medicines is compounded by factors that include long lead times for interna-tional orders; infrastructure gaps such as poor logistics and storage capacity, as well as high transport and distribu-tion costs.

To be contunued tomorrow •

22 ANALYSIS

Manufacturing pharmaceuticals: An untapped opportunity