FINANCIAL services firm, Old Mutual Zimbabwe (OMZ), is skewing its investment portfolios towards those that carry currency sensitivity to reduce its exposure to the local tender’s recent volatility, NewsDay Business can report.
The Zimbabwe Gold (ZiG) is continually losing value, threatening the viability of businesses as the negative effect of the depreciation is eroding revenues and investment returns.
In September, the Reserve Bank of Zimbabwe devalued the ZiG by 43% to ZiG24,39.
The dollar was yesterday trading at ZiG26,0142.
OMZ in June reported that it had ZiG8,11 billion in investments and securities, a figure that converts to US$592,29 million.
In an interview with NewsDay Business, OMZ chief executive officer Sam Matsekete said the group had been diversifying its portfolios, skewing them heavily towards real assets.
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“So, we would always be invested in portfolios that would carry currency sensitivity and when currency depreciates deeply or devalues there will be assets that will be impacted and would lose value at that point in time,” Matsekete said.
“But, we have also been diversifying our portfolios to skew them hugely towards real assets, which means that these are assets that are less sensitive to currency today and can hold value into the long-term.
“So for us in this cycle, the impact has been minimal because our portfolios and the assets that we’ve been investing in are skewed towards real assets, whether it’s in the real estate or export generating businesses or cash flow generating businesses, which allow us to defend against some of these adversities.”
He added that this was not to say there would not be any impact from the currency volatility, only that, with this strategy, it minimised the risks. In its half year report ended June 30, 2024, released last month, OMZ revealed that its investments include offshore assets, alternative investments, the agro-export value chain, assets in mining and a broad range of choices in the real estate sector.
Meanwhile, Matsekete said the group was on an accelerated drive towards sustainability.
“So, we look at sustainability using two lenses. The first one is our ways of doing business. The products that we design, the projects and the investments we make must actually always be based on decisions and choices that support sustainability,” he said.
“The second lense is looking at it from impacts based on direct interventions that we make in the community and these are supposed to achieve a situation where we can quantify the social impacts, the environmental impacts and say are they supporting a better future or a sustainable long term future.”
He added that the group had selected renewable and clean energy to underline its commitment to sustainability.
These renewable energy investments have so far been centred on solar and hydro, with two projects in those fields to be launched by the end of the month.
“Once these ones are launched, that will take the total number of our projects to 42 megawatts equivalent of projects that we have financed, that we have co-invested with others. That’s one example. But we have also, for a long time, as we select investments, been looking at which investments support environmental thrusts and impacts that we want to see,” Matsekete said.