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Imara upbeat on Zim’s prospects

Dumisani Muleya

IMARA Asset Management Zimbabwe says Zimbabwe would retain its 12% weighting in a new investment fund targeted primarily at European and American investors.

e=”Verdana, Arial, Helvetica, sans-serif”>This should come as rare good news for a country overwhelmed with negative publicity at home and abroad due to a prevailing political and economic crisis.

The Imara African Opportunities Fund was launched at the end of June by the firm, an independent financial services group based in Botswana and has offices across southern African. The fund is an open-ended offshore facility registered and licensed in the British Virgin Islands.

The Fund’s managers are mandated to take equity positions in cash-generative companies across Africa, including South Africa, Botswana, Egypt, Malawi, Mauritius, Kenya, Namibia, Nigeria, Ghana, Uganda, Tanzania, Zambia and Zimbabwe.

The Imara Group has asset management, corporate finance and stock broking operations in southern Africa, including in South Africa. The group has more than US$150 million under management in southern Africa and its corporate advisory division has raised more than US$1 billion for sub-Saharan corporations.

Lead fund manager John Legat, CEO Imara Asset Management Zimbabwe, said the initiative had attracted attention from investors in Europe and North America.

However, Zimbabwe’s economic woes and the humanitarian crisis caused by the widely condemned demolition of shantytowns and informal businesses have caused panic among investors.

“Zimbabwe’s current economic situation is well known internationally which is why it’s stock market trades at very low levels,” Legat said.

“Should the economics in Zimbabwe change in the future the stock market will experience a sharp re-rating. For the time being the exposure is 12% in the Imara African Opportunities Fund but this will be increased should the country embark on a credible economic reform programme.”

The Zimbabwe Stock Exchange – with 88 listed counters – is still one of the best developed in the region although it recently came close to a collapsed after investors boycotted the bourse it protests against “extortionist taxes”.

“Zimbabwe is therefore one of the few countries where asset prices are low and offer good value yet the financial system is relatively well-developed,” Legat said.

Legat believes Zimbabwe’s long-term prospects are bright despite the current problems.

“Zimbabwe still has much to offer – the tourism industry is already well developed and Zimbabwe’s mineral resources could be rapidly developed, especially platinum, gold, coal, chrome and natural gas,” he said.

“Zimbabwe justifies its place in our fund and Imara – in view of our strong presence in the country – is well positioned to take advantage of opportunities for the benefit of our investors.”

Legat said a number of African economies were registering good growth rates and Zimbabwe should be able to do so once it recovers from the crisis.

“Economic growth rates of 5-10% are being achieved in Ghana, Kenya, Uganda, Zambia, Angola, Mozambique and Tanzania, to name but a few. The authorities in countries such as these are keeping inflation under control while offering relatively stable exchange rates. They have embarked on wide-ranging economic reforms and are beginning to see the results,” he said.

“When Zimbabwe joins the ranks of these reform-minded countries, the weighting within the fund will rise to reflect its improved prospects for economic recovery. We remain confident that Zimbabwe’s long-term prospects are good, notwithstanding its current serious difficulties.”

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