May inflation hits 43-week high of 0.75 percent

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First Mutual Holdings CE Doug Hoto told the AGM yesterday that the group’s gross premium written for the first 5 months of 2017 decreased by 2% to $47.99 mln while the net earned premium was 1% down at $44.36 mln. The operating expenses, which includes claims and commissions remained stable at $35.4 mln while the technical result decreased by 5% to $8.96 mln. Meanwhile, rental income closed the period at $2.655 mln, a 5% decline “although the occupancy is more or less the same, primarily because of rent reduction negotiations.” He noted that total expenses decreased by 1% to $10.91 mln resulting in a 14% decrease in operating profit to $2.758 mln. Investment income increased by 1050% to $5.519 mln “because of the bull run that has been happening on the stock market.” Profit after tax for the period grew by 44% to $4.364 mln. – (Online)

RioZim Ltd, says the incessant rains coupled with power shortages impeded production in the first quarter. Consequently, Group gold operations suffered during Q1 2017 but according to acting chief executive Bheki Nkomo production has begun to increase in Q2.
Ultimately the company is set to meet its year end gold output targets. On the 700MW Sengwa power project, Nkomo said the group believes that it has found a serious investor with the right financial muscle to meet the cost of the project under a revised feasibility. – Financial Express (Online)

The country’s year on year inflation for the month of May has made another significant climb to 0.75 percent, after gaining 0.27 percent, reaching a 43-week high. An inflation rate as high as this was last recorded between September and October 2013 (Inflation was 0.9 percent in September 2013, before declining to 0.6 percent the following month). The main drivers of inflation were bread and cereals (2.37%), meat (1.84%), vegetables (2.02%), oils and fats (1.03%) as well as fish and sea foods (4.04%). These products have higher weights in the consumer price index and their upward movements have a substantial impact on the general price level of goods and services. Overall, the year on year food and non-alcoholic beverages inflation stood at 1.92 percent. – Financial Express (Online)

Sino Hydro, the Chinese company which won the engineering procurement and construction contract for the 600 megawatt expansion of Hwange Power Station, will have a 36 percent stake in the power project for at least six years. National power utility Zesa Holdings will hold the balance of 64 percent in the special purpose vehicle, Hwange Electrical Supply Company, set up for the expansion project. According to Zesa Holdings, the parent company to tenderer Zimbabwe Power Company said the arrangement was part of conditions precedent from the original equipment manufacturer for the project. – The Herald, 16 June 2017

Zesa has been forced to enter into a joint venture with Chinese firm, Sinohydro Corporation after it failed to raise the required US$350 million deposit to secure a US$1.2 billion loan from the Export-Import Bank of China for the refurbishment of Hwange 7 and 8 thermal power station. The joint venture will be managed through a special purpose vehicle called the Hwange Electricity Supply Company as a precondition for the release of the funds. ZPC sources said while the development was good as it would guarantee the release of funds, the company will however not have its way in controlling the power station. – Independent, 16 June 2017

A group of 10 potential investors interested in the proposed $400 million National Railways of Zimbabwe (NRZ) recapitalisation project have conducted a four-day voluntary due diligence inspection of the parastatal’s assets. NRZ public relations manager Nyasha Maravanyika said the voluntary tour by the group was a follow-up to the recapitalisation pre-bid conference held in Bulawayo last month. He said the gesture shows the investors’ seriousness in the parastatal’s turnaround initiative. The pre-bid conference was attended by more than 80 investors from various countries, including China, India, United Kingdom, Belgium, Malaysia and Dubai. During the voluntary due diligence tour,  Maravanyika said NRZ technocrats were on hand to answer questions and queries from the potential investors as well as providing clarification. – The Herald, 16 June 2017

Government has started repossessing farms from unproductive beneficiaries of the controversial programme to redistribute land seized from white farmers. This comes as vast swathes of land taken from white farmers, mainly in the cropping provinces, lies idle and Zimbabwe has not been able to fully feed itself since the land grabs began. Lands and Rural Resettlement minister Douglas Mombeshora yesterday issued notice to withdraw 38 offer letters given to individuals allocated land under the programme. – Daily News, 16 June 2017

Second-hand vehicle imports through Beitbridge Border Post surged by 38 percent in the period between January and May this year. The imports had fallen significantly in recent years, with people preferring to use less busy ports of entry like Plumtree, Chirundu and Victoria Falls. Vehicle imports through Beitbridge are processed at Manica and Malindi transit sheds. On average, a pre-owned car costs $5 000 inclusive of duty. Sources at the border post attributed the surge in vehicle imports to price cuts and the opening up of more car dealerships on the South African side. They said the prices were slashed by almost 30 percent after the dealers noted a decline in sales. Zimra director for Legal and Corporate Services Florence Jambwa said 90 percent of the imports were from Japan, while South Africa contributed 10 percent. – The Herald, 16 June 2017

By |June 16th, 2017|Categories: Headlines|

About the Author:

Kudzanai Sharara
Kudzanai’s background in financial journalism with ZFN, combined with a continuing education in financial management, provide a solid grounding for his work in the research department.