By Tawanda Musarurwa

HARARE – African Banking Corporation of Zimbabwe Limited (BancABC Zimba-bwe)’s predecessor and redundant units have been struck off the register.

Typically, any company that fails to submit annual returns for more than two years may be removed from the register in terms of Section 320(4) of the Companies Act (Chapter 24:03).

ABC Zimbabwe’s forerun-ner FMB Holdings Limited, and two of its now non-op-erational entities, African Banking Corporation Secu-rities Limited and African Banking Corporation Asset

Finance Limited have now been officially deregis-tered, announced registrar

of companies Ms Martha Chakanyuka in General Notice 63 of 2016.

At the time of deregistration, the three entities had nomi-nal capital of $2 000, $4 000

News Update as @ 1530 hours, Tuesday 12 April 2016

Feedback: bh24admin@zimpapers.co.zwEmail: bh24feedback@zimpapers.co.zw

BancABC Zimbabwe’s old units deregistered

and $4 000, respectively.

First Merchant Bank of Zim-babwe was established by Anglo American Corporation Zimbabwe Limited in 1956, later to be registered as FMB Holding Limited in 1971.

The ABC Zimbabwe group, which was formed in 1999, then entered into a series of share swap offers in 2000, made to the shareholders of FMB Holdings Limited, UDC Holdings Limited, EDFUND, the Bard Group of Companies and ULC Botswana.

The share swaps culminated in a primary listing of ABCH on the Botswana Stock Exchange and a secondary listing on the Zimbabwe Stock Exchange on Septem-ber 19, 2000.

FMB Limited, which had been operating as an Accepting House in the country since 1956, under the ownership of FMB Holdings was re-branded

African Banking Corporation of Zimbabwe Limited in 2001.

On the other hand, due to the group’s need to meet the Reserve Bank of Zimbabwe’s minimum regulatory capital requirement for merchant banks, African Banking Cor-poration Securities Limited

and African Banking Corpo-ration Asset Finance Limited were merged into the mer-chant bank.

In 2009, the bank was rebranded to BancABC, and was purchased for $265 mil-lion by Atlas Mara Co-Nvest Limited in November 2014.●

2 NEws

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BH24 Reporter

HARARE - Tobacco farmers have so far earned $13,2 mil-lion from the sale of 5,7 million kilogrammes of Virginia tobacco since the tobacco selling season began on March 30, latest Tobacco Industry and Marketing Board (TIMB) statistics show.

The 5,7 million kg of tobacco were sold both on the auc-tion and contract floors. The statistics show that a total of 3,3 million kg of tobacco worth $9,1 million was sold at the auction floors while 2,4 million kg worth $4,1 million was sold at the contract floors.

The tobacco sold is 61 percent more than what was sold during the comparable period last year. A total of 3,5 million kg worth $8 million had been sold during the same period last year.

The average price of tobacco at auction floors is currently $1,71 per kg while the con-tracted crop is being bought at an average price of $2,75 per

kg reflecting an increase of 2,7 percent from the prior compa-rable period.

TIMB said the top price for the contract floors was $5,60 per kg while at the auction floors it was $4, 99 per kg. The lowest price that has been recorded so far is $0, 10 per kg. A total of 76 bales have so far been rejected due to poor quality and poor packaging this season, compared to 79 bales rejected the same period last year.

This season tobacco volumes are expected to decline by 20 percent due to the El Nino induced drought which affected

the crop. Meanwhile tobacco farmers have raised concern over the new payment system saying they are being paid late and the money is taking time to reflect in their bank accounts.

Commenting on the issue TIMB public relations officer Mr Ishe-unesu Moyo said farmers should get proper information from the banks that they use because money typically takes between one and two days to reflect in bank accounts. “We are going to educate farmers on how the new payment system works and banks must tell farmers how an account number works to avoid confusion,” he said. ●

Tobacco farmers earn $13,2m

5 NEws

BH246

By Funny Hudzerema

HARARE -The expedient growth of the informal econ-omy has inhibited Govern-ment’s capacity to control the wage structure of the economy, which has resulted in low com-petitiveness in the economy, a senior economist has said.

Labour and Economic Devel-opment Research Institute of Zimbabwe (LEDRIZ) economist Mr Prosper Chitambara said the country’s economy is being dominated by the informal sector.

“The shrinking of the formal economy through de-industrial-isation has resulted in a boom in the non-formal economy through informalisation with the share of informal employ-ment to total employment rising from 84, percent in 2011 to 94, 5 percent in 2014.

“The Zimbabwean labour mar-ket has a very large informal sector, larger than the formal,

which affects the efficiency of the labour market institutions,” he said.

Currently the informal sector is employing thousands of work-ers with an approximate $7 billion circulating in the sector.

“It also implies that the infor-mal sector is locked out of markets for finance, technol-

ogy, and other resources that would enable them to close the gap. It has also been shown in literature that informal firms do not always “grow up” and join the formal sector.

“In many cases especially in developing countries they can remain stuck in an informality trap, excluded from markets

for finance and forced to evade taxes and other regulations to compete with their more productive formal competitors,” he said.

Mr Chitambara added that in order to sustainably address the issue of informality requires a combination of strong incentives for compli-ance and stiffer penalties for non-compliance.

“Informality discourages investment and weakens the overall competitiveness of the economy, because a number of informal enterprises are stuck in a low productivity trap.

“It is argued that being outside the regulatory framework implies informal enterprises can afford to be less productive than their competitors in the formal sector,” he said.

He added that Government should put in place policies that encourage the informal sector to become formalised.●

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‘Govt limited in determining wages in informal economy’

Mr Prosper Chitambara

HARARE - Challenges in moving money to overseas accounts is delaying final-isation of Government's acquition of mobile tele-communications firm Telecel Zimbabwe, a cabinet Minister said on Monday.

The Government is now the major shareholder in Telecel Zimbabwe after paying $40 million for the 60 percent stake in the firm previously owned by Russian telecom-munications group, Vimpel-com.

Vimpelcom signed an agree-ment for the sale with the Government late last year. Zarnet, a telecommunications company which is owned by the Government, acquired the stake.

Information, Communication Technology, Postal and Cou-rier Services Minister Supa Mandiwanzira told the Parlia-mentary Portfolio Committee on ICTs that although the full

amount had been paid for Telecel shares, the deal was stuck because the money was stil l to be moved overseas.

“The transaction has been done and is on the verge of being completed to the extent of having all the money paid. However some of the funds are stil l in Zimbabwe because of issues relating to liquidity funding of offshore accounts. The entire sum has not been remitted outside of our coun-try.’”

“But in terms of Zarnet hav-ing completed its obligations, I can confirm it has con-cluded its obligations. How-ever it has paid the money to a local account,” he said.

Minister Mandiwanzira said Vimpelcom would only trans-fer ownership after the Gov-ernment, through its proxy, has fully met the conditions of the sale.

“What is now remaining is the finalisation of the remittances. In terms of all agreement, the deal will be concluded when all that money has left this country,” he said.

Minister Mandiwanzira said the Government expected Telecel to make a profit.

“Telecel is in a space that has lucrative business and this is not the space for it not to make a profit,” he said.

Vimpelcom decided to divest from Telecel after struggling to dilute its majority share-holding as required in terms of the country’s indigenisa-tion laws, which require that indigenous Zimbabweans own at least 51 percent in multi-national firms.

Locals already owned the other 40 percent in Telecel.

- New Ziana●

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Govt close to completing Telecel takeover

HARARE - The local equi-t ies market cont inued on a posit ive run, after the mainstream industr ia l index added 0.07 to c lose higher at 98.47.

Trading dominated with s ix movers compared to two that traded in the red.

Cigarette manufacturer BAT Zim added $0,0500 to trade at $10,8000, whi le con-glomerate Innscor gained $0,0025 to $0,1900 and FBC Holdings bumped $0,0008 to sett le at $0,0660.

Also on the up was te le-coms giant Econet, which shi f ted upwards by $0,0006 to $0,2600 whi le F idel i ty L i fe went up by a marginal $0,0004 to c lose at $0,1030.

Trading in the red was Seed-Co, which s l id $0,0016 to c lose at $0,6499 whi le beverages producer Delta lost $0,0010 to $0,5700.

The mining index was f lat at 20.16 as Bindura, Fal-gold, Hwange and RioZim al l maintained previous pr ice

levels at $0,0102, $0,0050, $0,0300 and $0,1100 respec-t ively - BH24 Reporter ●

ZsE9

Industrials extend gains

MovERs CHANGE TodAy PRICE UsC sHAKERs CHANGE TodAy PRICE UsC

MASIMBA 2.81 0.73 SEEDCO -0.24 64.99

INNSCOR 1.33 19.00 DELTA -0.17 57.00

FBCH 1.22 6.60

BAT 0.46 1,080.00

FIDELITy LIFE 0.38 10.30

ECONET 0.23 26.00

INdEx PREvIoUs TodAy MovE CHANGE

INDUSTRIAL 98.40 98.47 +0.07 points +0.07%

MINING 20.16 20.16 +0.00 POINTS +0.00%

10 ZsE TABlEs

ZsE

INdICEs

stock Exchange

Previous

today

11 dIARy oF EvENTs

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

PowER GENERATIoN sTATs

Gen Station

11 April 2016

Energy

(Megawatts)

Hwange 356 MW

Kariba 453 MW

Harare 30 MW

Munyati 16 MW

Bulawayo 22 MW

Imports 0 - 400 MW

Total 1123 Mw

• Upcoming AGM - Falgold, KPMG Building, Corner 14th Avenue/Josiah Tongogara Street, Bulawayo,13 April, 1000hrs

• 26th April 2016 - The Fifty-Sixth Annual General Meeting of the shareholders of British American Tobacco Zimbabwe (Hold-ings) Limited; Place: British American Tobacco Zimbabwe Offices, 1 Manchester Road, Southerton, Harare; Time: 10.00 hours...

• 05 May 2016 - Barclays Bank of Zimbabwe AGM; Place: Meikles Mirabelle Room; Time: 1500hrs

THE BH24 dIARy

JOHANNESBURG - A top shareholder in Darty Plc will back Steinhoff 's $975 million takeover bid for the French electronic goods retailer, the South African furniture group said Monday.

Steinhoff said its offer had the support of Schroder Investment Management, a British hedge fund firm. Schroder owns about 14 per-cent of Europe's third-largest electronics retailer, making it the biggest shareholder.

Investors have until May 2 to accept the offer, which trumped a competing bid from French retailer Fnac last month and has the back-

ing of Darty's board.

The transaction would bulk up Steinhoff 's presence in Europe, where it already makes more than two-thirds of its 9,8 bill ion euros ($11,18 bill ion) of annual sales.

Darty earns 70 percent of its revenue in France but has 400 stores across Europe and competes with Media-Saturn, owned by Germany's Metro, and with Britain's Dixons. Steinhoff 's Conforama, like Darty and Fnac, has a strong presence in French high streets and retail parks. - Reuters●

REGIoNAl NEws 12

Top shareholder in France's darty backs steinhoff's $975m bid

Rand firms to third day in a row, stocks flat

JOHANNESBURG -South African's rand firmed for a third consecutive session against the dollar today as the greenback slipped while emerging markets lapped up a return of appetite for riskier assets.

At 0715 GMT, the rand traded at 14,6615 ver-sus the dollar, 0,5 percent firmer from Monday's New york close and near a one-week high.

Government bonds were weaker, with the benchmark instrument due in 2026 adding 1 basis points to 9,145 percent.

The rand continued to test the 14,60 resistance level which it last reached on April 1, shortly after the highest court in the land ruled that President Jacob Zuma had violated the con-stitution by not honouring an order to pay back state money spent on his home.

"Rand gains mostly just represent, and are certainly ultimately dependent on, the dollar," said currency

strategist John Cairns at Rand Merchant Bank in a note.

The rand strengthened in the previous session, rallying to its firmest in one week as sentiment toward emerging markets improved in the wake of growing expectations that the United States central bank would hold off raising interest rates for longer. On the stock market, the Top-40 index was flat in early trade. - Reuters●

The dollar slumped to its lowest in more than nine months on Monday as spec-ulation that the Federal Reserve won’t raise interest rates anytime soon spurred a search for yield outside the US.

The Bloomberg Dollar Spot Index, which tracks the currency versus 10 peers, tumbled in New york to its lowest since June as traders pushed back expectations for a rate increase by year-end. Currencies of commodity exporters, including South Africa’s rand, the Brazilian real and the New Zealand dollar, had advanced as investors reallocated money to higher-yielding assets. Eisuke Sakakibara, the for-mer Finance Ministry official in charge of currency inter-vention in Japan, said the dollar may drop to 100 yen by year-end.

The Fed is weighing signs of strength in the domes-tic economy versus slowing growth overseas as policy makers look to raise rates twice this year. Concern that an international slump, par-

ticularly in China, will spill over into the US has kept a lid on the central bank’s plans and boosted the appeal of assets overseas.

“The market has generally been trying to trade the weakness in the dollar, and to some extent, the recovery in risky assets,” said Sebas-tien Galy, director of for-eign exchange at Deutsche Bank AG in New york. “What we’re entering is a period of consolidation in the currency market related to the dollar. Even if we get better data, it will not convince anybody that the Fed is going to shift significantly its policy.”

Bloomberg’s gauge of the US currency was little changed at 1,174.25 as of 7:59 a.m. in Tokyo on Tuesday, after sliding 0,4 percent in New york. The greenback was at $1,1410 per euro from $1,1408. It was at 107,93 yen from 107,94.

scaling Back

Traders see a 48 percent likelihood of a rate increase in the US before the end of the year, down from 58 percent a week ago, futures contracts show. Investors have cut bets on the dollar in tandem, reducing net wagers on U.S. currency strength versus eight counterparts to

36,304, the least since July 2014, according to data from the CFTC.

A measure of the green-back’s momentum, known as the 14-day relative strength indicator, has fallen to 30, the level that some traders view as a signal the currency has reached extreme levels and may reverse.

“For the time being, we remain broadly neutral on the greenback’s near-term prospects and we see the current period of consoli-dative price action as likely to continue this week,” Eric Viloria, a strategist at Wells Fargo & Co. in New york wrote in a note.

Sakakibara, who was dubbed Mr. yen for his ability to influence the exchange rate in the 1990s, said the dollar may trade at 105 yen in the next few months. The level is “no problem” for Japan’s economy, the 75-year-old Sakakibara, who is cur-rently a professor at Aoyama Gakuin University, said in a Bloomberg Television inter-view. - Bloomberg●

INTERNATIoNAl NEws 13

Dollar falls to 9-month low as traders look for yield overseas

SINGAPORE — It would be easy to dismiss the assertion by BHP Bill iton CEO Andrew Mackenzie that commodity prices have bottomed as the wishful thinking of a min-ing executive keen to see some improvement in profit margins.

While it is likely that the boss of the world’s biggest mining company is hoping for an end to five years of a declining price trend for many of the commodities his company produces, there is enough price evidence to suggest he may be right.

It is probably a little too early to call for a rebound in commodity prices, and Mr Mackenzie was suitably cautious in his comments published last weekend in The Australian newspaper.

But the fact that it is now possible to construct a nar-rative, with supporting price data, for even a mild recov-ery in commodities is some-

thing of a sea change.

For at least the past two years it has been virtually unrelenting doom and gloom in the sector, with any price rallies proving to be false dawns as the industry battled oversupply as well as slowing demand growth in top con-sumer China.

The oversupply was a prob-lem the industry created for itself, having believed the hype that commodity demand and prices would rise for decades on Chinese demand, with supporting roles from India and other developing Asian nations.

The slowing demand growth in China was always inevi-

table, but it arrived sooner than virtually anybody expected, and given Bei-jing’s efforts to move to a more consumer-led economy, it is not likely that China’s appetite for commodities will re-accelerate any time soon.

So why is the boss of BHP expressing some optimism that the outlook for commod-

14 analysis14 ANAlysIs

Evidence suggests five-year commodity rout may be coming to an end

15 analysis15 ANAlysIs

ities is improving? "If you look at the basket of com-modities that we deal with, the numbers are self-evi-dent: the fall has stopped," Mr Mackenzie was quoted as saying in the interview pub-lished on April 9.

Spot iron ore in Asia is up 30 percent to $55,90 a tonne so far in 2016, Brent has gained almost 15 percent, London copper is almost flat as is Newcastle coal, while coking coal has risen about 14 percent.

These four commodities represent the bulk of BHP’s portfolio and while prices look weak compared with where they were five years ago, Mr Mackenzie is right insofar as they have stopped declining so far in 2016.

This certainly gives cause for some optimism that prices have arrested their declining trend, and while a sustained rally may be a little hopeful, a period of bouncing along

the bottom with little rallies and pullbacks is a reasonable expectation.

But what will it take for confidence to come back that commodity prices have actu-ally bottomed? It will take supply discipline and demand growth, or at least one of them. Looking at BHP’s major commodity products, it is not evident that supply discipline and demand growth are pres-ent in any meaningful way.

Iron ore is BHP’s top earner, and here the major produc-ers, including the top two Vale and Rio Tinto stil l have plans to increase output. Supply discipline is only coming from higher cost mines being forced to close, but it is stil l questionable whether enough of these operations are being idled to offset likely additions.

Seaborne iron ore volumes may actually rise, but only if more domestic Chinese output is shut down, meaning

that the demand side of the equation is extremely price sensitive. The major miners can have rising volumes, but only at the expense of low prices.

In copper, again supply dis-cipline is lacking, with new operations expected to add to global ore volumes this year. Demand is also some-what cloudy, with uncer-tainty over whether China’s appetite for imports can be maintained and market par-ticipants raising the possibil-ity that China may actually export refined copper given weak industrial demand at home and substantial inven-tories.

Coal is probably further down the road of supply discipline than other commodities, with formally major exporters like the US having virtually exited the seaborne market, and lower volumes coming out of Indonesia and Aus-tralia.

But this supply reduction is being matched by demand concerns, with the world’s top-two importers, China and India, buying less of the fuel in what may prove to be a structural shift lower. Crude oil is also battling its supply issues, with top producers meeting this weekend in Qatar in an effort to agree some kind of output freeze.

Similar to other commodities, it is far from certain that these efforts will actually work, meaning that crude is unlikely to experience much of a supply-led rally. Oil demand is somewhat more constructive, but even here it is likely to take months, if not years, for demand growth to catch up to availa-ble supply.

Overall, it seems that there are some reasons to be a little confident that commod-ity prices are set to stabi-lise, but the conditions for rising prices are stil l not fully apparent.-Reuters●