Barely 12 hours into August 16, the 7th Republican President elect of Africa’s second largest copper hotspot His Excellency Hakainde Hichilema, offshore markets were roaring positively with rally’s in the dollar bond markets observed 8.0% across the board in price.
“I don’t want to call it power, let’s call it servant leadership” – Zambia President-elect Hakainde Hichilema said while addressing a visibly excited electorate at his residence in Lusaka the capital. Hichilema promised Zambians better lives and a united Zambia.
Zambia’s 7th Republican President H.E. Hakainde Hichilema
“In the next couple of days I will be announcing my cabinet and it represents this country. We will reunite this country,” he said.
Wallstreet based JPMorgan has encouraged offshores to invest in Kwacha paper on the back of increase confidence in the new leadership as political risks ease. Emerging and frontier markets continue to attract liquidity as offshore players seek positive yields in the wake of a high inflation global environment and ultra thin treasury yields making it unattractive to invest in the west. Zambia’s bonds will fetch anything between 26.0% – 30.0% on the secondary market.
Despite being the only defaulter on its coupon payments on running dollar bonds, Zambians are optimistic about President Hichilemas leadership especially that he is pro IMF inferring from his political party manifesto. A successful restructure will expedite the debt restructuring process and will unlock untapped risk appetite which has for a year been constrained.
The Southern African nations currency outlook has been given a cue from higher copper prices on the London Metal Exchange – LME which has improved its dollar supply in addition to offshore inflows from players seeking yield.
Hichilema’s leadership is forecast to claw back risk appetite in a suppressed environment as he rolls out energy, mining, agriculture and manufacturing policy as per the United Party for National Development – UPND manifesto.
The Kwacha Arbitrageur