Axia partners forex generating firms

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AXIA Corporation Limited (AXIA) has partnered businesses that generate foreign currency as part of strategies to grow the company’s volumes going forward, a local equities research firm has said.
Due to the foreign currency shortages and the real threat of stock shortages, AXIA management recently suggested a strategy of acquiring and or partnering businesses that generate foreign currency. AXIA said the businesses may not be within the speciality retail sector.
“We believe that exposure to foreign liabilities is a concern for most retailers in Zimbabwe and AXIA is no exception. Management will have to be prudent in matching their foreign liability position with that of business volume growth in Zimbabwe,” Old Mutual Securities (OMSEC) said
AXIA as a business requires approximately 50 percent of its inventory to be imported, hence foreign currency supply is of critical importance.
OMSEC, which analysed Axia’s financial results for the six month ended December 2018, noted that too much of an exposure pegged at unsustainable exchange rates could result in supply bottlenecks and or sales demand declines that can be detrimental to the business.
“We however believe that management are experienced in managing this risk and any recovery in the foreign currency situation will benefit the consumer sector in which AXIA operates,” the local think-tank said.