Future-looking investors look beyond the headlines
Posted by CM on September 2, 2008
The brief excitement about a Zimbabwean political settlement of some sort being near is beginning to fade. Even with a slight opposition majority in parliament, it does not look like anything practical is going to change except perhaps for the worse.
The Mugabe government continues in power with an astonishing detachment at the economy’s deep problems and the tremendous suffering faced by the majority of people. The reports of the extent of the shortage of the staple maize meal, almost nine months before the next harvest (whose size and quality cannot be guaranteed to relieve the present food crisis) are alarming.
But for investors, Zimbabwe’s interest is in its promise; the potential spoils it offers for those who are able to take a long term view.
I am continually amazed at the number of investors who overlook the sustained negative international news blitz about the country to look for and try to advantageously position themselves for a better day.
The latest example of this type of investor is carried in a Reuters article entitled Bidvest profit up 10 pct, eyes Zimbabwe, U.S.
South Africa’s biggest company by revenues, services group Bidvest, posted a 10.1 percent rise in annual profit on Monday and said troubled Zimbabwe is among the places where it is looking for growth.
Chief Executive Brian Joffe said Bidvest was looking to invest and would raise about 600 million rand ($78.04 million) from selling its stake in waste management group Enviroserv, which has received a private equity buyout offer.
“Internationally speaking, we are looking to expand our food service business and we had one or two opportunities we are currently pursuing,” he said.
Bidvest already operates in Zimbabwe and is optimistic about growth in the southern African country, which is mired in a political crisis and grappling with hyperinflation.
“It’s premature to talk about it,” Joffe said. “We are still looking for opportunities in the U.S. We are definitely looking for opportunities in Zimbabwe.”
Hard-headed investors do not talk like this out of sentimentality or political expediency. They would have carefully looked beyond the heated headlines of the day to see the bright prospects of tomorrow.