Undersubscription and underwater ‘real’ yields is the best description for Thursday December 31, treasury bill sale. With aggregate interbank liquidity north of K3.5bln, the central bank in Africa’s red metal producer Zambia sold K760.4mln ($36.0mln) worth of bills in the last treasury bill auction of the year. This coincided with Zambia Statistics Agency (ZSA) release of December inflation headlines which accelerated 180 points north to 19.2% as food prices sprinted. The twenty seventh debt sale, saw an appetite of K905.2mln (face value) of which 74.0% was in the 1year. Bids satisfied (allocation) versus the initial asset amount on offer of…
Author: The Editor
With copper rallying over 76% (from March lows of $4,343 a metric ton) when supply chains bore the brunt of disease pandemic globally, to flirting with highs of $8,000 a metric ton, levels not seen in 8years on the London Metal Exchange (LME), Zambia’s mining prospects are begining to brighten. This outlook is double pronged stemming from new mines in the new Copperbelt of Africa dubbed Zambia’s North Western province and the opportunities that exist through restructure of existing mining assets on the Copperbelt Province of the Southern African nation. See below the copper price graph per metric ton. _________________________________________________________________________…
The central bank in Africa’s red metal hotspot will seek to sell government securities worth K12.3bln ($585.2mln equivalent) in the first quarter of 2021. According to a Bank of Zambia prospectus shared in the local press, the central bank will offer treasury bills in six lots of K1.3bln and bonds in three lots of K1.5bln respectively. Risk skew is forecast to remain towards shorter dated higher yielding assets as Zambia’s 2021 will be characterized by uncertainty around political risk factors as the copper producer readies to go to the polls while sovereign risks persist as the debt restructure progresses. Offshore…
With the advent of COVID19, central banks globally continue to play a key role in ensuring an optimal balance between both price and financial sector stability. This well aligns with the dual mandate they have. More has been expected from central banks especially with aiding absorption of disease pandemic induced credit risks and provision of the required liquidity to support businesses in growth suppressed environments. Notwithstanding the fact that COVID19, has accelerated deterioration of nations fiscal posture through worsening already existing economic feebleness, financial markets have continued to reflect fiscal fragilities through currency routs, interest rate volatility and rising non…
Lusaka Securities Exchange listed Madison Financial Services (ISIN:ZM00000000391) has faced a series of liquidity, credit and solvency issues governance related lapses that triggered regulatory take over some time in 2019. According to a LuSE further cautionary update and market announcement on December 24, XYLEM trading (Pty) will acquire 72.05% of Madison Financial Services. This will entail XYLEM taking over combined Lawrence Sikutwa and Associates (LSA) and ZFI Holdings Ltd stake in Madison Financial Services. The transaction involves two separate acquisitions of shares namely: by XTL of the 100% shareholding in ZFI from Enko Africa Private Equity Fund Limited (“Enko”) being…
The power utility in Africa’s second largest copper producer ZESCO Limited has named supply chain management expert Mwelwa Chibwe as board chairman. Currently serving as President & Chairman of the Zambia Institute of Purchasing and Supply (ZIPS) while simultaneously sitting on the ZESCO Ltd board and Procurement Director for Millennium Challenge Account. Mwelwa brings a wealth of experience in supply chain management and industrial engineering to the power utility. Zambia’s energy generation has suffered immense set backs such as climate change effects weighing in on production due to receding dam levels resulting in looming deficits since 2015 period to date.…
Royal Zambian Airlines has just added a layer of competition in the air travel space by being the second local carrier to fly into Johannesburg from Zambia’s capital Lusaka. The airline offers 4 return flights a week on a flexible ticket basis on condition changes are made within 24 hours (an offer second to none in the market). Air travel has had a turbulent year following lockdown protocols that saw various dependent sectors such as hotel and tourism and general business activity both locally and globally, depress. However with the subsiding of cases, economies have started to reopen as the…
The Economic Recovery Plan prescribes for an indaba in 1Q21 to discuss a stable tax regime while the state seeks to expedite MCM majority stake and find an equity partner in KCM _______________________________________________________________________ Africa’s second largest copper hot spot Zambia will be looking to rethink its mining frameworks as a part of an urgent economic recovery strategy leveraging off not only its rich mineral resource base but rallying red metal prices on the London Metal Exchange (LME). Flirting with highs last seen in 2013, London copper is trading for $7,872 a metric tone, a 78% rebound from COVID induced lows…
Mining excavation expert has advised the Zambian authorities about the current mining production concentration risks which are weighing production. Professor Peter Chileshe a senior lecturer in the faculty of mines at the Copperbelt University bemoaned the concentration risks in a few mines such as First Quantum Mining (FQM) while the unsettled issues with other mining giants in the sector continues to weigh production capacity and could yield vulnerabilities of the over depended on mines. “Theres too much of over – concentration of production and it is as though we have gone back to the ZCCM era (1982-2000). The majority of…
Will the ERP win the International Monetary Fund over as Zambia navigates its way out of economic turbulence?________________________________________________________________________ Africa’s second largest copper hotspot Zambia will on the December 17, have its 2021-2023 Economic Recovery Plan (ERP) unveiled by Republican head of state Dr. Edgar Lungu. Amidst economic turbulence occasioned by fiscal fragilities amplified by disease pandemic, the Zambian authorities will seek to spell a recovery plan that will assist in clawing back eroded growth and will set the stage for a V shaped recovery post COVID. Read also: Zambia approves Economic Recovery Plan 2021 After suffering the first default in…