Investors Need To Avoid Market Jitters And Stay The Course
The recent inflation spike coupled with volatility on the parallel market, low interest rates and a hazy economic outlook are just a few ingredients of what seems to be a rather distasteful beverage being served to investors in Zimbabwe.
Media coverage has raised toxicity, fueling anxiety levels through providing endless, sometimes contradictory, commentary on what actions individuals should take, the prize enigma being whether “this time is the same or similar to the previous woes of 2008”.
For one, the character of Mr Market (the Zimbabwe Stock Exchange) has been rather different. Volatility has been fueled by strong perceptive emotions by investors on the course. Being wise to the corrosive nature of currency depreciation has resulted in significant speculative behavior on the stock market, thereby elevating inherent risk levels.
The question now for some is whether to cut losses and get out or perhaps hold onto stocks, maintaining an investment as a buffer or hedge.
With the stock market having risen more than 50 percent this year, just how affordable are these stocks for a local investor whose salary has not increased by this much?
It has become increasingly important, therefore, to ensure that, if one is investing on the stock market, the right stocks are being held in a portfolio.
It is not enough to secure your hard-earned savings by buying “good and strong” stocks. A sure way to lose value is by purchasing great stocks at excessive prices. Without realizing it investors can be stuck in a pattern of panic buying over-priced stocks for fear of losing more value. How does one understand value in this opaque economic climate?
Gains for seasoned investors are not won on daily market oscillations but rather from growth experienced over many years. The economy will eventually settle. So, what’s the right move in this tumultuous environment?
“All intelligent investing is value investing acquiring more than you are paying for. You must value the business in order to value the stock,” advises American investor and businessman Charlie Munger.
Staying the course involves investing in quality stocks at good prices. It negates the need for stock market gambling. Invest in profitable companies with good corporate governance, value addition and potential for growth. Stock prices will eventually reflect the true value of the underlying companies. It is best to own shares in a few select companies that will help to build wealth over time.
This, though, is only one part of the investing equation, since it focuses on just one investment class. We have all heard of the idiom ‘don’t put all your eggs in one basket’. Balancing one’s investment, however, can be quite daunting, especially where you cannot see the price of the investment every day or where a property investment is not visible or listed on a stock exchange.
Fortunately, Zimnat Asset Management is equipped with the right people, skills and tools to safely navigate investment of your hard-earned savings or retirement funds. Accurate interpretation of information by experienced professionals provides a clear advantage in the investment world.
ZAM’s investment services go beyond stock market investments. They include bonds, money market and alternative investments as well. The research team keeps up with market trends and financial news to ensure that clients’ strategies remain on track to achieve long-term growth. This is all part of Zimnat’s endeavor to make life better.
By Rishay Lalla
2019 Suppliers Registration Invitation
The Zimnat Group is inviting all current and prospective suppliers of the following goods and services to submit their credentials for consideration and subsequent inclusion on its 2019 suppliers’ database.
Required Services and Goods
- Office Stationery
- Groceries & Cleaning Materials
- Office Furniture & Equipment Supply & Repairs
- Shop Fitting & Office Partitioning
- Exhibition Stand Designs
- Sanitary Disposal & Services
- Cleaning Services
- Locksmith Services
- Pest Control And Fumigation Services
- Protective Clothing, Footwear & Corporate Wear
- Printing & Designing
- Computer Networking, Hardware Consumables
- Hardware, Electrical Accessories & Engineering Services
- Telecommunication Installation & Repairs
- Motor Vehicles Supplies, Spares & Accessories
- Motor Vehicle Servicing, Repairs & Panel Beaters
- Motor Bikes Supply, Spares & Accessories
- Towing Services
- Fuel & Lubricants
- Logistics, Shipping & Clearing Services
- Travel Agency Services
- Hotel, Accommodation, Conferencing & Catering
- Building Maintenance, Carpentry, Plumbing, Painting Services
- Security Services – Biometric, CCTV, Guards, CIT
- Borehole Drilling & Maintenance
- Welding & Steel Fabrications
- Air Conditioner Supplies & Maintenance
- Firefighting Equipment & Servicing
- Supply, Service & Maintenance Of Generators
- PA Systems , Videography & Photography
- Advertising, Branding & Promotion Materials (T Shirts, Banners, Sign Posts)
- Branded Promotional Materials & Corporate Gifts
- Outsourced Courier & Messenger Services
- Drugs & Medical Supplies
- Advertising & Creative Services, Including Digital Advertising & Video Production (Ad Agencies)
- Media Booking Services
- Suppliers of Risk Diagnosis Tools
- Insurance & Risk Management
- Outsourced Assessment Services (Pre & Post Loss Claims assessments)
- Valuation & Survey Services (Motor & Non-motor)
- Recruitment Services
- Electronics
- Software Development & Licencing
- Supplies of Data recovery and management
- Garden landscaping and Florist services
- Car Rental Services
Interested suppliers should submit the following for consideration:
- An Introductory Letter
- Company Profile
- Certified VAT Registration Certificate
- Certified CR14
- Certified CR6
- Current Tax Clearance Certificate (ITF263)
- Payment Terms
- Certified Certificate of Incorporation
- At least three traceable references
The submissions should be sealed, clearly stating the category being applied for
NB: By submitting the above documents, it does not automatically mean you will be added to our Suppliers Database. There will be a review and an evaluation process that must take place first.
Interested Companies should send their documents to:
The Procurement Committee
Zimnat Group
Zimnat House,
Corner Third Street & Nelson Mandela Avenue,
Harare,
Zimbabwe
Closing Date is 22 February 2019
Zimnat Assists Hatcliffe Centre
Zimnat handed over bed linen, an examination bed and a storage container, together worth more than $7 000, to St Christopher’s Children with Disability Centre in Hatcliffe, which provides services for children with disabilities.
The storage container is for storing equipment and various materials used at the centre.
St Christopher’s Children with Disability Centre’s major focus areas include various types of therapy, such as physiotherapy, occupational therapy and speech therapy, aimed at improving or restoring children’s lost functions or compensating for them through the provision of various aids.
It also offers activities to help children with disabilities cope with daily living and improve their quality of life as well as that of their families. It offers too support and counselling to the children and their families.
Zimnat group marketing executive Angela Mpala said Zimnat, which aims to make life better for others, was happy to be able to partner St Christopher’s Centre in making life better for disabled children.
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“St Christopher’s Centre is providing much needed assistance to children with disabilities. Apart from the various forms of therapy it offers, its efforts to combat and eliminate discrimination against children with disabilities and their families is very much in line with our own motto of making life better for others,” she said.
“We fully identify with their goal of working towards a society in which children with disabilities participate fully and enjoy the fundamental rights that we are all entitled to.
“The different forms of therapy provided at St Christopher’s Centre are important in helping children with disabilities overcome the challenges they face as a result of their disabilities.
“We are happy to be able to partner the centre and support its work through the donation of bed linen, an examination bed and a storage container, all of which the centre identified as among its major needs,” Ms Mpala said.
Have you checked if you are under-insured?
The recent Monetary Policy Statement by the Reserve Bank Governor and the increase in prices in the market have led to speculative behaviour among most suppliers, resulting in an upsurge in property values. Motor vehicle owners and sellers have not been spared this trend.
It is imperative that your assets are insured for the correct replacement value. If they are not, this means they are underinsured, which will result in any claim being reduced in the same proportion as the underinsurance. This is known in insurance terms as applying the average condition.
The whole idea of insurance is to replace your assets in the event of a loss occurring. This means that whatever value you insure your asset for should be sufficient to enable you to replace it or at the very least purchase an asset of the same level as the one you had. If you are underinsured you cannot achieve this, which defeats the objective of having insurance.
Under-insurance can be defined as insuring your asset for a value that is less than the cost of replacing it or of buying something close to it.
For example, if you have a 2006 Toyota Corolla that you valued at $5,000, whereas, if we were to look for that same vehicle in the market we would find it priced at $10,000, you would be underinsured by $5,000. In the event of a claim being made, the average condition would be applied. This means that the amount payable on the claim would be calculated in relation to the difference between the sum insured and the market value.
The following is an example of how a claim is settled in the event of underinsurance:
- Client X insured her vehicle for a Sum Insured of $5,000, although the actual replacement value or market value is $10,000.
- Client X is 50% underinsured, meaning that an average of 50% will be paid on all claims.
- Unfortunately, Client X becomes involved in an accident and to repair the vehicle needs $1,000.
- In such a scenario the Insurance Company will pay $500 of the claim after the 50% average has been applied.
To avoid inconvenience in the event of a claim, we urge you to insure your vehicle and other assets for the correct market value. The best way of determining whether or not your vehicle is insured for the correct value is to go around the market and confirm whether the value of your vehicle is still in line with the prices being charged to replace the vehicle.
For further clarification, please call 086 7700 4952 or email directbusiness@zimnat.co.zw. You can alternatively contact your broker’s office if you are insuring through a broker.
Zimnat Marathon Raises $7 000 For Cebisani Ndlovu’s Surgery
Zimnat’s first charity marathon, which was held at Barclays Sports Club in Harare on November 10, managed to raise almost the whole amount originally quoted for 30-year-old Bulawayo resident Cebisani Ndlovu’s spinal cord surgery.
When Mr Ndlovu approached Zimnat for assistance, the amount needed at that time for the surgery at Mater Dei Hospital in Bulawayo was $7 500. The marathon raised almost $7 000.
Mr Ndlovu, who holds a Bachelor of Commerce (B.Com.) Honours degree in Risk Management and Insurance, has difficulty walking, even with the aid of crutches, which he first started using in Form One.
Moved by his plight, Zimnat decided to hold a charity marathon to raise as much of the money as possible. Hundreds of people were touched by Zimnat’s plea to assist Mr Ndlovu, as evidenced by the turnout for the run, with 740 people taking part in the half-marathon or runs over shorter distances and others donating towards the cause.
Participants also had an opportunity to talk to Mr Ndlovu and have pictures taken with him, as he came to witness the marathon.
The races, which started at 5.30 am, were pegged at 5km, 10km and 21km, with the majority of people taking part in the 5km run. Altogether, $6 810 dollars were raised.
Zimnat has paid out $550 of this amount for a Magnetic Resonance Imaging (MRI) scan, which will facilitate an updated quotation for the surgery required.
“The response to our plea for members of the public to take part in this marathon to help Mr Ndlovu was overwhelming,” commented Zimnat group marketing executive Angela Mpala.
“Zimnat is driven by a passion to empower companies and clients to reach their full potential and to making life better for others. We would like to thank all those who participated in the marathon or made donations towards this cause for helping us to make life better for Mr Ndlovu,” she said.
The Zimnat Group, which is comprised of Zimnat Life Assurance, Zimnat General Insurance, Zimnat Asset Management and Zimnat Financial Services, is associated with Sanlam, the biggest non-banking financial services group on the continent.
Zimbabwe Economic Outlook – Fourth Quarter
With the 2018 Zimbabwe harmonised elections out of the way, rebuilding a struggling economy was the first and possibly the most difficult task for the new president Emmerson Mnangagwa. The appointment of ex-bankers Professor Mthuli Ncube and George Guvamatanga as Finance Minister and Permanent Secretary in the Finance and Economic Development Ministry was met with optimism and excitement by the larger populace of Zimbabwe.
To kick-start economic recovery, the Finance Minister launched an economic blueprint dubbed Transitional Stabilisation Programme (TSP), set to run from October 2018 to December 2020. The programmes’ main focus was to stabilise the macro economy and financial sector, to introduce policy and institutional reforms, to address infrastructure gaps and to launch quick wins to stimulate growth.
The International Financial Institutions, which include the African Development Bank, the International Monetary Fund, and the World Bank endorsed the TSP, whilst reiterating the need to have a thoughtful implementation of measures outlined in it.
The International Monetary Fund further adjusted the economic growth forecast to 3.6% from the 2.4% earlier projected in the beginning of the year. This however was contrary to a government adjustment of the same metric to 6.3% from 4.5% mentioned earlier in spite of the economy showing a number of visible challenges.
The biggest challenge the economy was facing was foreign currency shortages, a high budget and current account deficit, inflation pressures and infrastructure deficiencies.
As a measure to deal with the monetary and foreign currency challenges, the governor of Zimbabwe’s central bank the Reserve Bank of Zimbabwe, Dr John Mangudya, in his mid-term monetary statement announced that Zimbabwe was going to bring into effect again foreign currency accounts above the normal accounts. This move he said, was meant to increase hard cash deposits, to get rid parallel currency markets and to stabilize prices. Although the move saw people disposing off the local bond notes through hording of basic commodities, it led to a rise in prices of most essential consumer goods. The rise in prices of commodities however was caused by the adjusting of the economy to new policies according to the finance minister.
In an unorthodox approach, Finance Minister Professor Mthuli Ncube added to the monetary statement with controversial fiscal reforms which the president of Zimbabwe said were a “necessary pain”. Perhaps the most debated part of the reform was the introduction of a 2 cents per every dollar tax on every electronic money transfer which was introduced in order to restore fiscal equilibrium. Some economist have categorised the tax as a quick win under the TSP. Others have also mentioned that the tax would increase the collection base of the Government in the informal sector.
The question everyone would want answered in this uncertain period, is what’s next for the economy of Zimbabwe? My answer would be even in our uncertain periods we have always risen above and created opportunities, a good example would be arguably the use of digital banking as a necessity more than a want.
The Importance Of Customization In Managing Funds
Zimnat Asset Management provides carefully constructed, individually customized and separately managed accounts. These discretionary and non-discretionary portfolios allow clients to define their own parameters for returns and liquidity based on their risk tolerance, cash flow needs and investment horizon.
The research team holds detailed discussions with prospective clients to establish the desired investment objective, performance benchmark and expected risk/return characteristics, among other requirements.
Critical elements of our separately managed accounts include:
- Risk management: robust analysis of cash flows, debt and corporate governance of the companies underlying the bonds, equities and private equity we are invested in.
- Strong structure, thorough set-up and documentation process.
- Adaptability to changing inflation rates and interest rates that are characteristic of the local economic environment given the changing policies.
Our strategy seeks to deliver consistent returns, preserve principal and provide liquidity. How is this achieved:
- The research team regularly meets to discuss our fundamental outlook for the economy, focusing on factors such as GDP growth, unemployment and interest rates. Data from a range of internal and external economic sources are compiled and debated by the team, and a consensus view is established. This view is then translated into investment strategies, which guide portfolio decisions.
- Periodic reviews of the portfolio and investment guidelines ensure that the portfolio remains relevant for the client’s investment objectives.
- Scenario analysis is used to evaluate portfolio performance in different environments to help determine optimal portfolio positioning across different investment sectors.
- Investment classes include: government bonds, corporate bonds, listed equities and private equity.
ZAM provides an integrated approach to client servicing for separately managed accounts. Each client has access to a client service team consisting of the client advisor who also acts as the portfolio manager, the Risk and Compliance Officer and a client account manager.
- The client advisor serves as the key point of contact for the client and manages the overall client relationship. He provides strategic advice reflecting industry perspective and presents insights on investment allocation.
- The client advisor is supported by a team of research analysts who continuously assess the economic environment and the portfolio’s performance in line with the market outlook.
- The client account manager sets up the client’s account on ZAM’s accounting and client information systems. They also respond to day-to-day queries regarding deposits, withdrawals, current account balances and updated statements.
- The Risk and Compliance Officer handles all contractual, legal and regulatory issues.
- A crucial component in the risk management of separately managed accounts is the role of the custodian. A custodian works alongside the asset manager and is tasked with the settlement, safekeeping and reporting of all investments made.
Managed funds are especially valuable for large investors who have the goal but not the ability or resources to expertly manage their risks and returns.
Innovation Meetings
The business recently launched an innovation forum which holds meetings fortnightly. Participants are from all SBUs across the business and the teams come together to discuss proposed solutions for services products and processes for the business.
Presentation of the best solutions will be presented at the end of the year.
Zimnat Holds Golf Day At Borrowdale Brooke
Zimnat held its annual golf day at Borrowdale Brooke Golf Course in the month of August. Participants included clients from all four of its businesses units, namely Zimnat General Insurance, Zimnat Life Assurance, Zimnat Financial Services and Zimnat Asset Management. Prospective clients and business partners were also in attendance.
The day on the greens proved to be an excellent platform for Zimnat managers, staff and clients to not only play some challenging rounds of golf but also to interact with one another in an informal setting and discuss business opportunities and the services and products Zimnat offers.
The first tee off was at 11am with a four ball alliance format being played , loads of exciting prizes were won and the day ended with a relaxing cocktail in the golf course lounge . The first four ball alliance that scooped the number one prize comprised of Doctor Simbarashe Mazonde, Irimayi Madyambudzi, Artwell Marimira and Ngoni Nomatter Makiwa.
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Zimnat Runs Charity Marathon
Zimnat will hold its first ever Charity Marathon on the 10th of November 2018 at Barclays Sports Club Harare. The marathon is being held to assist 30 year old Cebisani Ndhlovu from Bulawayo who needs to undergo spinal code surgery at Mater dei Hospital Bulawayo. In order to undergo the surgery, Cebisani needs $7 500. He holds a BCom Honours Degree in Risk Management and Insurance.
The marathon is open to everyone willing to participate and contribute to this worthy cause. The distances to be run starting from 6am, include 5, 10 and 21km. With those running the 5km attract $5 and the others attracting $10 as registration fees.
Please visit the Charity Marathon website to register.