Zambia’s April annual inflation has signaled an infinitesimal ebb of 0.1% to 22.7% from previous months climb as reported by the Zambia Statistics Agency – ZASA in the capital. The consumer price index – CPI was supported by a 0.6% ease in food inflation to 27.2% offsetting a 0.5% climb in non food prices to 17.5% for the month of April. This nonetheless keeps inflation at a 61 – month high. Read also: Zambia’s March inflation climb, narrows premiums on govie securities a further 60-points The copper producers inflation has been cost push driven fueled by a weakening currency following…
Author: The Editor
In the labyrinth of economic woes characterized by suppressed business pulse, spiraling inflation and currency depreciation, Africa’s second largest red metal hotspot, Zambia, is at the cusp of a bail out package with the Washington based lender, the International Monetary Fund (IMF). This follows the lenders Director Africa, Aemro Abebe comment captured by Bloomberg on April 15 where he expressed hope on progress and the optimism in getting endorsements of political leaders. However time decay as the parliament nears dissolution ahead of the August polls remains the copper producers adrenaline barometer if bailout is to happen by May 14. Whether…
The central bank in Africa’s second largest copper producer has successfully shored its bullion reserves by K345.6 million (circa. $15 million) since yearend of 2020 to end of 1Q21. This initiative is supported by a gold purchase agreement signed with First Quantum Mining – Kansanshi Copper Mine and the state mining investment vehicle ZCCM-IH last year. Bank of Zambia opted to shore falling foreign exchange reserves buy stocking up with gold following recent discovery of the asset in key parts of Zambia. The red metal producers reserves have fallen to decade lows of $1.3billion weakening its import cover to less…
Despite operation disruption in a COVID struck year, Gemfields owned Kagem was placed under care and maintenance with staff placed on leave with 80% remuneration. The Lufwanyama based emerald mine made a strong come back with a $31.4milion gemstone sale conducted between March 15 and April 17 of this year. Zambia’s emeralds, remain the best in the world competing with Brazilian stones have since one of the world’s largest pieces dubbed Inkhalamu and Insofu vernacular for lion and elephant remain aggressively demanded in Europe and Asia. This emerald sale were presented for in-person and private viewings by clientele in Tel…
After a series of negative information ranging from a hat-trick of coupon defaults on dollar bonds to deteriorating economic conditions exacerbated by a COVID19 pandemic, Africa’s second largest copper producer, Zambia was on April 12 rated ‘CCC’ on its local currency debt (from ‘CC’) while maintaining default (‘RD’) on the foreign currency portion of its debt. The rating agency noted the real possibility of a local currency default, on the back of the red metal producers weak public finances and tight domestic financing conditions. Fitch estimates the 2020 general government deficit widened to 12% of GDP and forecasts a 2021 deficit…
Despite an underwater term structure of interest rates, the 1-year treasury bill remains the sweetest spot on the Kwacha term structure of interest rates. Amidst rising inflation a 20 points below 23.0%, one year bills are the only short term assets yielding a return above inflation at 25.75%. With market liquidity of circa K3.8billion into last Thursday’s (April 8) debt sale, K800.3million of the one Kwacha yard of demand was housed in the 1-year bucket for the sole reason that the tenor is the most attractive. Risk skew remains towards shorter dated higher yielding assets as players manage duration risks…
Oil and gas giant, the Lusaka Securities Exchange (LuSE) listed PUMA Energy (ISIN0000000194) earnings were slowed by a confluence of drivers to include dollar scarcity, fuel subsidies in the copper producer in pandemic year and suppressed air travel. According to a PUMA Energy Plc audited report, bottom line earnings grew 11.0% to K4,618million (circa $205million) supported by an upward adjustment in pump prices on December 26, 2019 despite a 5.0% ebb in demand for petroleum products occasioned by pandemic effects on the economy ecosystem in 2020. EBITDA levels rallied 28.0% to K270.0million. The oil and gas entity recorded K2.8million positive…
Lusaka Stock Exchange – LuSE listed power trading Copperbelt Energy Corporation (ZM: ISIN0000000136) FY20 financial performance revealed earnings resilience at top line, cost and bottom line levels despite the hurdles faced in the year. Despite being a pandemic year, the energy trader was in the labyrinth of upside risks to include a volatile regulatory environment that saw the pronouncement of statutory instrument No.57 – the common carrier – that disadvantaged its operations and extended uncertainty around the controversial Bulk Supply Agreement (BSA) renewal following its expiry, CEC was still able to churn out $311.0million in revenues, a 9% ebb from…
Energy reforms in Africa’s second largest copper producer have been key in the development of the sector which has for years been marred by pricing inefficiencies and other related hurdles that continue to deter significant investment potential. As part of liberalization of the energy sector, the Zambian authorities passed the Electricity Amendment Act in 2020 which allowed for Independent Power Producers (IPPs) to sell power directly to consumer. Another key was to ensure Cost of Service Study (CSS) completes, to aid determination of not only cost reflective tariffs to help IPPs thrive but also optimality of electricity prices. The Energy…
Zambia’s private sector pulse rallied to a 2-year high after headlining 49.7 in March, 2.6 points higher than February’s 47.1 but was 0.3 points shy of the 50 mark. According to Markit Economics, Zambia’s private sector neared stabilization on the back of improved demand, new orders and employment stability. This will be the softest deterioration in 2-years as the copper producer remains in contraction for 25-months straight. Fifty (50) is the benchmark for contraction for expansion (>50) and contraction (<50). The Southern African nation continues to be weighed by cost push input inflation which is at a 4-month high as…