BH24 Reporter

HARARE - Zimbabwe's total depos-its on mobile money platforms for the third quarter to September 30, 2015 amounted to $458 million, the latest Postal and Telecommunications Regula-tory Authority of Zimbabwe (POTRAZ) report shows.

Although a significant 10,5 percent decline from the $512 million recorded in the previous quarter, the figure shows the growing influence of mobile money platforms in driving financial inclusion in the country.

According to POTRAZ, the number of mobile money subscribers increased by 7,1 percent to reach 6,7 million from 6,2 million subscribers recorded in the sec-ond quarter of last year.

And the number of agents increased by

6,9 percent to reach 29 775 from 27 862 recorded in the previous quarter.

The rise in the numbers of agents and mobile money subscribers was, however, notwithstanding the 10,5 percent decline in total deposits on the platforms.

"Although mobile money subscribers have been increasing, mobile money deposits have been experiencing periodic

fluctuations," said POTRAZ.

Nonetheless, the growing influence of mobile money transfers should not be under-estimated.

Reserve Bank of Zimbabwe statistics show that Zimbabwe’s banking sector deposits stood at $4,3 billion as at Sep-tember 30, 2015, which is still signifi-cantly higher than mobile money plat-forms could hope to accrue at this point in time. But at $458 million during the same period, mobile money deposits are playing a significant role in catering the segments of the economy that were pre-viously "unbanked".

Figures from the central bank also show that at least $61 billion had been moved through mobile money platforms between 2009 and 2014 through 299 million transactions.

“Declining income and employment has seen a dip in the use of formal financial services hence individuals prefer to use mobile money services which is cheaper.

“Banks’ contribution to financial inclusion has declined and there is need to develop a business model if banks want to regain lost ground,” read part of the study.

The study indicated that 63 percent of people who are using the mobile money services are small to medium enter-prises, 5 percent of which are formal and 95 percent informal, which should be a concern to traditional banks in view of the growing informalisation of the econ-omy.

Although mobile money platforms are unlikely to supplant the traditional bank-ing system in the foreseeable future, their current role is significantly comple-mentary.●

News Update as @ 1530 hours, Monday 25 January 2016Feedback: bh24admin@zimpapers.co.zwEmail: bh24feedback@zimpapers.co.zw

Mobile money deposits indicate growth in financial inclusion

BH242

BH24 Reporter

HARARE - Listed telecoms firm Econet Wireless Zimba-bwe has started upgrading its network in some parts of the country to enhance quality of service.

According to Econet, the upgrade, which started today and ends on Wednesday, will be carried out in parts of Hara-re's Central Business District and selected residential areas, the greater part of Masho-naland East, some parts of Mashonaland Central (Jumbo Mine, Mazowe, Iron Cap, Iron

Duke Mine and Blackforby) as well as Fombe, Avilla and Ruwangwe in Manicaland.

Econet chief executive Mr Douglas Mboweni said the upgrade may result in inter-mittent service disruption to service in these areas.

“The upgrades will ultimately result in much improved per-formance on data, voice and SMS for our subscribers. We thank our valued custom-ers for their continued sup-port and continue to appeal to them to bear with us as we endeavor to give them a

seamless service,” he said.

Last month, Econet Zimba-bwe announced that it would receive $300 million of a $500 million new loan facility that has been extended to parent company Econet Global by the China Development Bank and Chinese multinational tele-communications equipment and systems company ZTE Corporation.

Prior to accessing the $300 million facility, the Zimba-bwean subsidiary had invested in excess of $1,2 billion in the country.●

3 NEws

Econet starts network upgrade exercise

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BH244

By Funny Hudzerema

HARARE – Local wholesale and retail giant N.Richards has invested $1 million in a new store which opened in Tynwald today, bringing the number of the group’s branches in the country to 26.

Speaking during the official opening of the branch group director Mr Archie Dongo said the group is going to open more shops around the coun-try to promote the consump-tion of local products.

“If we include stock, fixtures and other things we have invested more than $1 million and last year we opened two branches and we are expect-ing to open more.

“Where there are opportu-nities we will definitely take advantage of them to open more branches to service peo-ple around the area and we are looking for customers who are under serviced,” he said.

The director said more than 90 percent of products that the group stocks are manu-factured locally and the group only imports products which are not manufactured in the country.

“We are promoting the buy Zimbabwe concept in the country we want our indus-tries to start growing by pro-moting them through selling their products.

“To encourage production and consumption of local products, we need to work together as a nation, the business sector must produce products that meet the needs of the cus-tomer and make them read-

ily available where they are needed at the right price,” said Mr Dongo

He added that the group is at an accelerating expansion level since last year but one it opened four branches and two last year.

“We believe that importing products that can be produced profitably in Zimbabwe is not sustainable in the long run.

“Our contribution to the econ-omy is therefore in growing the market for locally made products which should result in increased capacity utilisa-tion by our manufacturers and possibly increase employment

numbers in response to the increased demand,” said Mr Dongo.

Industry and Commerce Minis-ter Mike Bimha, who presided over the opening ceremony, said it was a big achievement for the company as it pushes for excellence in the country’s wholesale and retailing busi-ness.

“As a ministry we are par-ticularly overjoyed to be part of this welcome develop-ment.“The company quickly responded positively to the Government’s call and efforts to buy locally as a way of reviving our ailing industries by becoming a partner of the Buy Zimbabwe campaign as a way of promoting local con-sumption of home-grown Zim-babwean products,” said Min-ister Bimha.

He added that Government will continue its work to improve the business environment of the retail sector.●

5 NEws

N.Richards targets more branches across Zimbabwe

BH246

HARARE - Africa recorded a 3 percent drop to 53 million inter-national tourist arrivals last year as the rest of the world recorded a surge in visitors, latest statistics from the United Nations World Tourism Organisation (UNWTO) show.

According to the UNWTO Tour-ism Barometer, the North African region, at 8 percent, accounted for the biggest drop in arrivals on the continent while sub-Saharan Africa recorded a 1 percent decrease.

The drop in arrivals in North Africa was likely influenced by distur-bances in the region and a ban on international flights to Egypt in the

last quarter of the year by countries such as Russia and Britain after a plane carrying tourists crashed.

“Limited available data for Africa points to a 3 percent decrease in international arrivals, reaching a total of 53 million,” the UNWTO said, noting that availability of data on the continent remained scarce.

“In North Africa arrivals declined by 8 percent and in Sub-Saharan Africa by 1 percent though the lat-ter returned to positive growth in the second half of the year.”

The UNWTO however anticipates that Africa will rebound this year, registering a growth of between 2

and 5 percent in arrivals.

Despite the slump registered in Africa, overall international tourist arrivals surged 4,4 percent to 1,2 billion in 2015.

“2015 marks the 6th consecutive year of above-average growth, with international arrivals increasing by 4 percent or more every year since the post-crisis year of 2010,” the UNWTO secretary general Taleb Rifai said.

“The robust performance of the sector is contributing to economic growth and job creation in many parts of the world. It is thus critical for countries to promote policies

that foster the continued growth of tourism, including travel facili-tation, human resources develop-ment and sustainability,” he said. In terms of regional results, the Americas, Europe as well as Asia and the Pacific regions registered a growth of over 5 percent while the Middle East was up 3 percent.

China, the United States and the United Kingdom accounted for the bulk of outbound tourists due to strong performance of their curren-cies and economies.

The UNWTO is projecting that inter-national tourist arrivals will grow by a further 4 percent this year.-New Ziana●

7 NEws

Africa stutters as international tourist arrivals surge

BH248

HARARE -Depressed activ-ity was the order of the day as the mainstream industrial index started the new week higher at 103.17 following a 0.12 points bump.

A couple of heavyweight gains pushed the market north-wards.

Giant telecoms Econet gained $0,0027 to close at $0,1982,

while beverages manufac-turer Delta inched up $0,0007 to $0,5500.

Banker CBZ and short-term insurer NicozDiamond were unchanged at $0,1100 and $0,0162, respectively.

No counter traded in the neg-ative territory as activity was limited to four counters.

The mining index lost a fur-ther 0.24 to settle at 19.53 as nickel producer Bindura lost a marginal $0,0003 to $0100.

On the other hand, Falgold, Hwange and RioZim main-tained previous price lev-els at $0,0050, $0,0300 and $0,1040, respectively

- BH24 Reporter ●

ZsE9

Equities gain despite low activity

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BH2410

MovERs CHANGE TodAy PRiCE UsC sHAKERs CHANGE TodAy PRiCE UsC

Econet 1.38 19.82 BINDURA -2.91 1.00

DELTA 0.12 55.00

iNdEx PREvioUs TodAy MovE CHANGE

INDUSTRIAL 103.05 103.17 +0.12 points +0.12%

MINING 19.77 19.53 -0.24 POINTS -1.21%

11 ZsE TABlEs

ZsE

iNdiCEs

stock Exchange

BH24

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12

13 diARy oF EvENTs

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

PowER GENERATioN sTATs

Gen Station

25 January 2016

Energy

(Megawatts)

Hwange 253 MW

Kariba 285 MW

Harare 30 MW

Munyati 32 MW

Bulawayo 20 MW

Imports 0 - 200 MW

Total 887 Mw

—28 January 2016 – Chamber of Mines Zimbabwe state of the Mining industry Report 2015 launch; venue: Rainbow Towers; Time: 0730hrs -1300hrs

—10 February 2016 - Nampak Zimbabwe Annual General Meeting: venue 68 Birmingham Road, southerton, Harare: Time 12:00

—23 February 2015 - 38th Annual General Meeting of the members of Powerspeed Electrical limited; Place: Powerspeed Board-room, Gate 1, Powerspeed Complex, Corner Cripps Road and Kelvin Road North, Graniteside, Harare; Time: 1100 hours

THE BH24 diARy

CAPE TowN - Homeowners looking to sell their houses or downscale might not be able to after the Reserve Bank’s monetary policy committee raises interest rates by the expected 50 basis points on Thursday.

The committee is widely expected to raise rates to 6,75 percent, which would in turn raise the prime lending rate to 10,25 percent.

The Bank’s latest data show that mortgage advances to the private sector rose 0,8 percent in November, com-pared to 3,81 percent during the same month in 2014.

"We could conceivably get to slowing demand (in home pur-chases)," said First National Bank property strategist John Loos.

"This, I believe, will ulti-mately lead to slowing house price growth, at least to rates below CPI inflation, which would mean declining real house prices."

However, fewer house pur-

chases — and the fewer mort-gage applications that go with this — are not expected to encourage lenders to offer "prime minus" loans to attract consumers and stoke demand. "Lenders’ costs of funding (and) capital requirements these days probably don’t allow for such lending on a larger scale.

"The average differential above prime rate has come down somewhat over the past two years, according to Ooba statistics, but I’m not sure it will easily get back to prime minus," Mr Loos said.

Mortgage originator Ooba found lenders charged the current prime rate of 9,75 percent plus 0,24 percent on

average last November.

SA Home Loans CEO Kevin Penwarden said the firm had seen clients who sold their properties mid-mortgage, irrespective of whether their accounts were in arrears, indicating changes in their financial circumstances.

"It’s difficult to answer the question on whether clients are selling their properties below their property value — a forced sale scenario," said Mr Penwarden. "It is true that in some cases the purchase offers that some of our clients receive are below the market value that our valuers deter-mined the last time they vis-ited the property.

"But that does not necessar-ily mean the sale is below the intrinsic market value at the time of sale. The sale price achieved is sometimes even less than the amount owed to SA Home Loans. Again, this does not necessarily mean the sale is below market value. In such instances, we do try to enter into an agreement with the client for the repayment of the shortfall."

Standard Bank said it had not observed these trends.

Nedbank said clients who could not afford instalments had avoided sales in exe-cution by using its assisted sales programme. More than 6,000 Nedbank customers had benefited from this.

"From experience, between 20 percent and 30 per-cent of market value is usu-ally saved by choosing this option. In addition, we also ‘forgive’ a portion of the shortfall or residual balance after the sale," said Nedbank Retail Home Loans’ Thozama Mochadibane. - Bdlive ●

REGioNAl NEws 14

sA: Rate hike set to put screws on home loans

Oil extended gains after the biggest two-day rally in more than seven years.

Futures were up 1,1 percent in New York after earlier swing-ing between gains and losses near $32 a barrel. Front-month prices capped a 21 percent advance over two sessions at the close Friday after the February contract expired Wednesday at $26,55 a barrel, the lowest since 2003. Hedge funds reduced record bets on falling prices ahead of the rally, data from the US Commodity Futures Trading Commission shows.

“Once the buying started, it became a scramble,” Michael McCarthy, a chief strategist at CMC Markets in Sydney, said by phone. “The long-term down-trend remains in place and until we crack that, the market has to remain cautious.”

Oil is still down about 12 per-cent this year as volatility in global markets adds to concern over brimming US stockpiles and the prospect of additional Iranian exports. Prices may take as long as three years to normalize and a speedy

rebound is unlikely, Bank of Montreal Chief Executive Officer William Downe said in an interview in Davos, Switzer-land, on Friday.

West Texas Intermediate for March delivery gained as much as 55 cents, or 1,7 percent, to $32,74 a barrel on the New York Mercantile Exchange and

was at $32,50 at 2:55 p.m. Hong Kong time. Total volume traded was about 97 percent above the 100-day average. The contract rose $2,66 to $32,19 on Friday. Front-month prices gained 9,4 percent last week.

oil Bets

Brent for March settlement climbed as much as 63 cents, or 2 percent, to $32,81 a bar-rel on the London-based ICE Futures Europe exchange. The contract gained $2,93, or 10 percent, to $32,18 Friday. Prices advanced 11 percent last week. The European bench-mark crude was at a discount of 1 cent to WTI.

Speculators’ short position in WTI, or wagers on falling prices, dropped by 16,782 contracts, or 8,4 percent, to 184,193 futures and options in the week ended Jan. 19, according to CFTC data. Longs fell by 4,580 to 266,150, bring-ing the net-long position up 12,202 to 81,957.

New York crude capped a sec-ond annual loss in 2015 as the Organization of Petroleum Exporting Countries effectively abandoned production limits to defend market share, exacer-bating a global glut.

Ecuador and Venezuela are pro-posing output quotas for OPEC to increase prices, a statement published in Ecuador presiden-cy’s official gazette shows. - Bloomberg●

iNTERNATioNAl NEws 15

oil extends gains after biggest two-day rally in seven years

By Jordan Roy-Bryne

Gold and Silver have held up well during the recent selloff in equi-ties.

From December 28 through Wednesday the broad NYSE lost 10,4 percent while the S&P 500 lost 9,6 percent. Precious Met-als gained strength during that period. Gold advanced 3 percent while Silver gained 1,7 percent.

Gold relative to the NYSE broke its downtrend and touched an 11-month high. Gold relative to global equities (excluding the US market) reached a 2-year high. Precious metals have clearly ben-efitted from the equity selloff but therefore figure to lose strength as the equity market begins a relief rally.

Equities have become very over-sold and are forming a bullish reversal. The weekly candle chart of the S&P 500 is shown below. The market is forming a bullish hammer (reversal candle) right at important support. The week is not over but we expect volume to be sizeable. The last two ham-

mers on big volume came at the October 2014 and August 2014 lows.

The market became extremely oversold this week as only 15 percent of stocks within the NYSE were trading above their 200-day moving average. That is the low-est figure in more than four years. Furthermore, various sentiment indicators are showing extreme pessimism. The AAII survey for example is showing the lowest amount of bulls since 1987.

The S&P 500 could rally as high as 1990 where there is major resist-ance. Wednesday’s low should

hold for at least a few months. The recent poor performance of the gold miners is another signal that the metals (Gold and Silver) are at risk of making lower lows. During the aforementioned period when the metals were positive the miners (GDX and GDXJ) lost 9,6 percent and 12 percent.

That relative and nominal weak-ness is a strong signal that the recent strength in the metals is unlikely to last. GDX and GDXJ are charted below. The miners are recovering in part due to the recovery in the stock market.

They are also retesting Tuesday’s

breakdown to new lows. The rally has been weak as there is strong resistance overhead in the form of recent support ($18 for GDXJ and $13 for GDX) and the 50-day moving averages.

Recent relative weakness in the gold miners along with the bullish reversal in the equity market is a bearish development for precious metals. Gold and surprisingly Sil-ver have held up well amid the decline in equities.

They enjoyed a safe-haven bid yet are likely to lose that bid as the equity market begins a relief rally. The gold stocks, while initially following the stock market could resume their decline once metals have resumed their downtrends. Precious metals bulls should wait for an extreme oversold condition amid extreme bearish sentiment before turning bullish.

As we navigate the end of this bear market, consider learning more about our premium service including our favorite junior min-ers which we expect to outper-form in 2016. - The daily Gold●

16 analysis16 ANAlysis

Gold could lose safe-haven bid as equities rebound