About Us

Morgan & Co is an investment banking group that was formed through a

partnership between a number of respected Zimbabwean financiers and a
group of highly experienced international investors

• Licensed by the Securities and Exchange Commission of Zimbabwe (SECZ)

• Member of the Zimbabwe Stock Exchange (ZSE) and Financial Securities

Exchange (FINSEC)

• Best Innovative Stock Broker (2021) – Financial Markets Indaba Awards

Securities Trading Research Advisory Services Private Equity

Morgan & Co Team
Research
Mobile: +263 78 358 4745
Email: batanai@morganzim.com
+263-242-883994-8,
+263 8677008101-2
Skype: batanai.matsika1
Sales & Trading
Mobile: +263 77 394 0770
Email: davide@morganzim.com
+263-242-883994-8,
+263 8677008101-2
Mobile: +263 77 479 5854
Email: tafara@morganzim.com
+263-242-883994-8,
+263 8677008101-2
Skype: tafara.mtutu
Mobile: +263 77 214 8699
Email: lungani@morganzim.com
+263-242-883994-8,
+263 8677008101-2
Mobile: +263 77 488 0140
Email: gabriel@morganzim.com
+263-242-883994-8,
+263 8677008101-2
Mobile: +263 78 383 9234
Email: precious@morganzim.com
+263-242-883994-8,
+263 8677008101-2
State of the Market Presentation
News Measures & Policy Shifts
• The suspension of trading of dual-listed stocks on the Zimbabwe Stock
Exchange (ZSE)
• Capital gains tax for shares held for a period not exceeding 270 days was
reviewed to 40% (tweaked to 180 days)
• A review of capital markets regulations to curb speculative tendencies
• All domestic foreign currency transfers to attract IMTT of 4%
• Entrenching the multi-currency system and inter-bank market exchange
rate through legislation for the NDS1 period
• Upwards review of the bank policy rate to 200% discourage speculative
borrowing
• Introduction of Gold Coins as an alternative store of value
Global Economic Slow Down & Price Level Risks
8%

6.8%
7%
6.1%

6%

5%
3.2%
5.2%
4% 3.6%
3.9%

3% 2.9%

2%

2.5%
1% 1.4%

0%
Est 2021 2022 Proj 2023

World Output Advanced Economies Emerging Marked & Developing Countries

Global Inflation Forecasts : Serial Upside Surprises

Global Inflation is a weighted average of individual countries’

numbers using GDP valued at purchasing price parity as
weights

WEO: World Economic Outlook

 100%
200%
300%
400%
500%
600%
700%
800%
900%

0%
Jan-19

Apr-19

Jul-19

Oct-19

Jan-20

Apr-20
Inflation Developments (Y-o-Y)

Jul-20
837.5%

Oct-20

Jan-21

Apr-21

Jul-21

Oct-21

Jan-22

Apr-22

Jul-22
280.4%
Inflation Developments (M-o-M)
45.0%

40.0%
35.5%
35.0%
30.7%

30.0%

25.0%

20.0%

15.0%

10.0%

3.5%
5.0%

0.0%
Oct-19

Oct-20

Oct-21
Apr-19

Apr-20

Apr-21

Apr-22
Jul-19

Jul-20

Jul-21

Jul-22
Jan-19

Jan-20

Jan-21

Jan-22
Zimbabwe : Money Supply Growth (M3)
80.0%

70.0%

60.0%

50.0%

40.0%

30.0%

20.0%

10.0%

0.0%
Oct-19

Oct-20

Oct-21
Apr-19

Apr-20

Apr-21

Apr-22
Jul-19

Jul-20

Jul-21
Jan-19

Jan-20

Jan-21

Jan-22
-10.0%
Zimbabwe GDP Growth (MoF)

9.0%

8.0% 7.8%

7.0%

6.0% 5.6%

5.0% 4.6%

4.0%

3.0%

2.0%

1.0%

0.0%
Est 2021 Proj 2022 Proj 2023
 0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
1961

1963

1965

1967

1969

1971

1973

1975

1977

1979
Population Growth Trend

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

2017

2019

2021
1.53
YTD Performance of the ZSE All Share Index
35,000

29,441
30,000

25,000

20,000

15,000

10,000

5,000

-
03-Jan-22

03-Feb-22

03-Mar-22

03-Apr-22

03-May-22

03-Jun-22

03-Jul-22

03-Aug-22

03-Sep-22
An analysis of the ZSE All Share Index reveals that it has de-rated from a peak of 29,441 to 15,024 points currently.
This represents a year to-date (YTD) movement of just 38.82% compared to an estimated movement in the parallel
market rate (PMR) of 356% since the beginning of the year.
US Dollar Market Capitalisation (at parallel market rates)
10,000,000,000
9,095,762,882
9,000,000,000

8,000,000,000

7,000,000,000

6,000,000,000

5,000,000,000

4,000,000,000

3,000,000,000

2,000,000,000
1,936,222,540

1,000,000,000

-
Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22
ZSE Worst Performers (YTD)

-39.3 Dairibord

-40.5 Zimplow

-42.3 TSL

-45.1 Willdale

-74.3 Bridgefort Capital

-80.0 -70.0 -60.0 -50.0 -40.0 -30.0 -20.0 -10.0 0.0

YTD %
 100

0
10
20
40
50
60
70
80

30
90

25.3
Morgan & Co All-Share Index

5.9
32.8
Morgan & Co Industrial Index

16.9

4.5
Morgan & Co Financial Services Index

0.8
Valuation Metrics

21.6

Morgan & Co Consumer Sector Index

7.1

Morgan & Co Food & Agriculture

60.4

Sector Index
17.0
16.5

Morgan & Co TMT Sector Index

7.8

Morgan & Co Banking Sector Index

Hist PER
3.3 0.7

Morgan & Co Insurance Sector Index

3.8 1.2

Fwd PER

Morgan & Co Manufacturing &

23.4

Logistics Sector Index

4.7

Morgan & Co Real Estate Sector Index

1.8 0.2
9.6

Morgan & Co Building Materials &

Construction Sector Index
2.5

Morgan & Co Tourism & Hospitality

85.9

Sector Index
17.1

Morgan & Co Consumer Non-

17.4

Discretionary Sector Index

5.9

Morgan & Co Consumer Discretionary

22.8

Sector Index
7.0
Top Picks: Delta Corporation
Current Price: ZWL$256.20
Market Cap: ZWL$334.1bn
Fwd PER: 5.0x
Prospective Dividend Yield: 4.4%

The ease in lockdown restrictions has underpinned Delta’s

volumes recovery across all its units in Zimbabwe and South Delta Share Price
Africa. This has been complemented by growing USD sales 500.00

which have alleviated several production-related constraints, 450.00

priming the business for sustained recovery vis-a-viz emerging 400.00

350.00
global risks.
300.00

250.00
Performance Outlook 200.00
Delta continues to ride on its extensive inflation pass-through 150.00

ability as global inflation permeates into local CPI growth. We 100.00

expect margins to strengthen in the short-term because of 50.00

consistent production and increased sales volumes. We pin the 0.00

30-Apr-21

31-Aug-21
30-Sep-21

31-Aug-22
31-Oct-21

30-Apr-22
31-May-21

31-May-22
31-Jan-21

30-Jun-21
31-Jul-21

31-Jan-22

30-Jun-22
31-Jul-22
28-Feb-21
31-Mar-21

28-Feb-22
31-Mar-22
31-Dec-20

30-Nov-21
31-Dec-21
company’s long-term growth potential on the planned capex in
major business units.
Top Picks: Econet Wireless
Current Price: ZWL$118.45
Market Cap: ZWL$306.9bn
Fwd PER: 6.6x
Prospective Dividend Yield: -

The TMT sector is poised to recover for the first time since
crippling currency changes were instituted in Zimbabwe in 2019. Econet Share Price
Econet, the sector’s market leader (74% voice and c.59% data 350.00

services), is anticipated to cement its position through a rebound 300.00

in USD cashflows which will address the low capex spend and 250.00
the settlement of FX-denominated liabilities.
200.00

150.00
Performance Outlook
We anticipate the Operating Margin to soften to 47% in 2022 100.00

because of increasing energy costs. However, waning FX risks 50.00

are likely to drive a recovery in the PAT Margin in FY24 as the -

30-Apr-21

31-Aug-21
30-Sep-21
31-Oct-21

30-Apr-22

31-Aug-22
31-May-21

31-May-22
31-Jan-21

30-Jun-21
31-Jul-21

31-Jan-22

30-Jun-22
31-Jul-22
31-Dec-21
31-Dec-20

28-Feb-21
31-Mar-21

30-Nov-21

28-Feb-22
31-Mar-22
settlement of debentures nullifies the persistent exchange losses.
Top Picks: Innscor Africa
Current Price: ZWL$309.38
Market Cap: ZWL$176.3bn
Fwd PER: 5.9x
Prospective Dividend Yield: 5.1%

Food security risk has been on the rise globally, and Zimbabwe
has note been exempt. Grain output fell below expectations in
Innscor Share Price
Zimbabwe’s latest agriculture season and we see Innscor closing 700.00
the gap in light of import exemptions in strategic grains. The
600.00
business is strategically positioned as the country’s leading player
500.00
in food processing and manufacturing with extensive vertical
400.00
chain integration, and we maintain that this will drive the
business’ resilience going forward. 300.00

200.00

Performance Outlook 100.00

We expect the increased grain imports in the coming months to -

30-Apr-21

31-Aug-21
30-Sep-21

31-Aug-22
31-Oct-21

30-Apr-22
31-May-21

31-May-22
31-Jan-21

30-Jun-21
drive performance in Innscor’s milling operations (National

31-Jul-21

31-Jan-22

30-Jun-22
31-Jul-22
31-Dec-20

28-Feb-21
31-Mar-21

30-Nov-21
31-Dec-21

28-Feb-22
31-Mar-22
Foods) and, in turn, downstream businesses. We also pin our
strong earnings expectations on the extensive inflation pass-
though ability and synergies from related businesses like Simbisa
Brands.
Top Picks: Meikles Limited
Current Price: ZWL$114.96
Market Cap: ZWL$29.4bn
Fwd PER: 2.9x
Prospective Dividend Yield: 5.2%

Despite challenges faced by formal retailers, Meikles’ Pick n Pay

store count and sales volumes continue grow as the business
leverages off its partnership with JSE-listed Pick n Pay and funds Meikles
from disposals of several hospitality assets (Mentor Africa and 300.00

Meikles Hotel). The business now boasts 61 stores compared to 250.00

OK Zimbabwe’s 68 despite being 36 years younger than the

200.00
latter.
150.00

Performance Outlook 100.00

We anticipate that the business will sustain its aggressive growth
50.00
given the availability of funds from asset disposals as well as its
ability to anchor new suburban retail developments in -

31-Mar-21

31-Mar-22
30-Apr-21

31-Aug-21
30-Sep-21

31-May-22
30-Apr-22

31-Aug-22
31-May-21

31-Jul-21

31-Oct-21

31-Jul-22
31-Jan-21

30-Jun-21

31-Jan-22

30-Jun-22
28-Feb-21

28-Feb-22
31-Dec-20

30-Nov-21
31-Dec-21
Zimbabwe’s capital.
Top Picks: Hippo Valley Estates
Current Price: ZWL$207.01
Market Cap: ZWL$40.0bn
Fwd PER: 3.0x
Prospective Dividend Yield: 1.1%

Global sugar prices have slowed, losing 2% compared to last

year and forecast indicate that the prices will continue to hover
around US$0.18/lb throughout 2022. Although export sales have Hippo Valley Estates Share Price
declined, the local market has absorbed excess volumes despite 600.00
the pressure on disposable incomes without compromising on
500.00
pricing.
400.00

Performance Outlook 300.00

We pin Hippo’s resilience on sugary beverages manufacturers’ 200.00

recovery given that foreign currency shortages that limited 100.00
production have waned.
-

30-Sep-21
30-Apr-21

31-Aug-21

31-Aug-22
31-Oct-21

30-Apr-22
31-May-21

31-May-22
31-Jan-21
28-Feb-21

30-Jun-21
31-Jul-21

31-Jan-22
28-Feb-22

30-Jun-22
31-Jul-22
31-Dec-20

31-Mar-21

30-Nov-21
31-Dec-21

31-Mar-22
Q&A