Zambia is on course to re-introduce a national airline in Q1:19. This will be through a partnership between the government of Zambia being majority shareholders with 55% equity as the remainder is held by Ethiopian Airline. Ethiopian Airline is the best in Africa with a track record of success and the affinity to dominate African skies through aggressive partnerships with nations. The mystery around Zambia having a national airline remains. Is the timing right? There is no better time in the history of Zambia since the demise of Zambia Airways in 1994 than this time for the reestablishment of a…
Author: The Editor
280 bps spread between the 1 yr and 5 yr points drove auction behavior Kwacha assets are perceived to be 400-600 bps overvalued Of the K1.65 billion on offer in the 14 Dec bond sale, central bank in Africa’s second largest copper producer, Zambia, only sold K245 million. This translated to a 14.8% subscription rate, the poorest outcome for the year seen. The dismal performance was attributed to not only low liquidity but player’s shied away reserving their funds for 1 yr treasury bills in the last auction of the year to be held on 20 Dec. The current…
Zambia will, on the 14 Dec have the last bond sale of the year. This sale will be a re-opening of the 3yr (ISIN: ZM1000003815) and 5yr (ISIN: ZM1000003823) securities with K1.65 billion across the spectrum ranging from 2 yr – 15 yr tenors on offer. However, secondary market yields hoover around 24% and 26% pricing in the 2 yr and 3 yr buckets reflecting a 525 bps average credit spread above the last primary bond curve in the same tenors. Read also: Widening spreads between ‘treasury -bill and swap’ yields could suggest overvalued kwacha assets Ideally it would be…
The Economics Association of Zambia – EAZ has advised the state to seriously consider inclusion of Economics and Finance in Zambia’s education curricula. This was contained in a speech delivered by Association President Dr. Lubinda Haabazoka at the first ever economic dinner gala held at Intercontinental hotel on 12 Dec. In his speech, Dr. Haabazoka said, “The EAZ wished to request the government to consider including economics and finance as a standalone subject that should be taught in primary and secondary schools. This is one of the best ways of including financial education in our curriculum. The EAZ is ready…
An economic think tank in Africa’s, second largest producer, Zambia has urged the mines to refrain from arm twisting the state using lay – offs to counter the proposed 2019 tax regime proposal. The Economics Association of Zambia – EAZ stated in a press release responding to the Chamber of Mines statement that the new mining tax regime for 2019 could lead to 21,000 layoffs and $500 million decrease in investment spending over the next three (3) years. “The mining industry remains the most important industry in Zambia and a significant contributor to 75% of foreign exchange earnings. The mining…
Leading United Kingdom development finance institution Commonwealth Development Corporation – (CDC) Group Plc will inject US$180 million in Liquid Telecoms for broadband connectivity expansion. This investment will focus on the untapped communities across the African continent, including supporting Africa’s thriving tech start-up ecosystem with high-speed internet and cloud-based services. With Brexit uncertainty CDC accesses ex EU markets With Brexit uncertainties more and more British firms have been seen to access ex European Union markets. This transaction is manifestation of the USD$4.5 billion investment pledge CDC has committed to over the next 4 years in Africa. Clearly CDC wants to be…
Barely a day to the House of Common vote on Brexit, Theresa May has succumbed to advice from law makers to delay the vote. May (62) signed a draft divorce deal with the European Union in Brussels a fortnight ago and commenced a debate in parliament on 05 Dec to last upto 11 Dec with a vote. May’s chances of a divorce deal nod on the 11 Dec remain very bleak. May has been opposed by ‘europhiles and euroskeptics’ existing even in her own minority conservative party. May was cited for contempt of parliament for failing to produce ‘full’ legal…
The Central Bank in Africa’s copper producer Zambia last Thursday sold K950 million (cash terms) worth of treasury bills in a fully subscribed sale. Appetite was K1.61 billion in bids of which 70% was skewed towards the 1- year (the most attractive point) paying 23.2%. Of this K950 million was absorbed with a 62% skew in the 1 -year. See below the term structure of kwacha interest rates showing the spread between the kwacha primaries and the forward exchange ‘implied’ rates used for swap pricing. The swap curve is on average priced 950 basis points (bps) above the current primaries…
“In the highly competitive Zambia country category, Stanbic Bank has emerged victorious. The judging panel reached this decision based on the lender’s outstanding financial performance, as well as its industry-shaping strategic initiatives,” said judges. Leading global banking and financial markets magazine the Financial Times has voted Stanbic as best bank in Zambia for the year 2018. The financial times owned publication dubbed The Banker Magazine cited Stanbic Bank for industry-shaping strategic initiatives and outstanding financial performance. This is the second award Zambia’s largest bank by asset size is receiving this year. Earlier this year, the bank was named the Best…
Global private equity investors remained bullish on their prospects in Africa in 2018, promising to increase their allocations and doubling down on their decade-long plans, a new study shows. At least 76% of those surveyed planned to increase or maintain their provisions to African private equity over the next three years, while 53% anticipated increasing their allocation to the continent. Of those surveyed, 67% said they would consider investing in a first-time African fund. Nearly two-thirds of investors also viewed Africa as more attractive for ventures than developed markets over the next ten years. Increased performance and diversification are part of what’s…