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Zimbabwe's Elections 2013 - Index of Articles
gambling on Zim polls
Maposa, Mail and Guardian (SA)
June 07, 2013
investors from around the world who are watching Zimbabwe, it is
not a question of if but when to jump into the market
flew from London to take a gamble on the future of Zimbabwe's economy
this week, and he was not alone.
He found himself
in a room full of other such "gamblers" and stock-market
investors from around the world who have been watching Zimbabwe
and are now thinking this could be the time to put down the money,
particularly with elections around the corner.
is always the question. Do you go in before or after the election?"
Nasir asked. "My bet is the time is now, before this market
and prices [of shares] start going up. If the economy grows to even
half of what it was, you are talking rich pickings."
funds for investors based in the Middle East and was among more
than 140 investors who met in Harare this week to seek out opportunities
on Zimbabwe's booming stock market.
Imara, the fund that hosted the event, more than 60 international
institutions attended, with the number of guests reaching an all-time
of the Zimbabwe market is under way," said Tino Kambasha, executive
director of Imara Zimbabwe. "This is happening worldwide, but
is especially evident across the South African investment community.
New perceptions of risk and reward are taking hold."
In a global
economy that has stagnated in many places, large foreign funds are
eager to find a new home for money and the year-on-year growth in
Zimbabwe's share prices have not escaped their radar.
Imara, in the 12 months since its previous conference, some stocks
have doubled. Delta, the country's largest brewer and a unit of
SABMiller, has seen its market capitalisation rise from $836-million
to $1.7-billion. Telecoms operator Econet has grown from $677-million
to $1.1-billion over the same period.
This has drawn
the attention of large South African funds, according to Kambasha.
Among them are
Investec and Allan Gray, which, brokers say, are becoming increasingly
involved on the local market.
Four years ago,
foreign investors were rare on the local market. Now they account
for about 80% of the trades on the exchange, according to data from
the Zimbabwe Stock Exchange.
After the South
Africans, Americans are the second largest group of investors looking
at Zimbabwe. Asian and Japanese investors are also getting involved
and Middle Eastern money is also floating around. Zimbabwe is seen
as one of a group of sub-Saharan markets likely to grow rapidly.
Nigeria and Zimbabwe are what a lot of investors are looking at,"
Nasir said. "South Africa, not so much. You can't see too much
long been fed a steady diet of bad news about Zimbabwe, which should
make its market a hard sell. But Kambasha said investors were well
from representatives of foreign institutions indicated in-depth
understanding of the Zimbabwe market, the policy environment and
the potential for strong growth in several sectors, including mining,
agriculture, banking, retail and services," Kambasha said.
drilled down into levels of detail that suggest they are not only
interested in general terms in Zimbabwe's growth potential, they
are [also] here to do business."
stock market got off to a bright start this year, rising 20.3% in
January alone, the fastest growth rate on the continent for that
The market overcame
a temporary dip to go on an extended record-breaking rally, and
is now up 40% since the start of the year and more than 60% higher
than its level this time last year.
The whole market
is valued at $5.4-billion, a bargain for an exchange that houses
most of the country's biggest industries. Compared with similar
companies in South Africa and Kenya, Zimbabwean firms are seen as
is cheap, attractively cheap," a South African investor, Colin
Greene, said. "The idea is to take a position now and sit in
there for a while."
But the impending
election also clouds the outlook – Finance Minister Tendai
Biti says uncertainty alone may have knocked 3% off the economy
seem convinced a "credible"
election is possible, according to one foreign investor who
did not want to be named.
possibly be worse [than the last election] and people may be ready
to accept a credible, as opposed to a free and fair, election. We
saw this in Kenya."
local business groups have called for a firm date for elections
to end the uncertainty, some companies do not seem to be too concerned
head of Delta, said elections had in fact been good for business
in the past.
experience is anything to go by – and we've had eight elections
over the past 13 years – on all those occasions, consumption
has been enhanced," said Gowero. He joked that it might have
something to do with politicians seeking to win over voters.
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