There exists a thin line between finance and economics in modern day. The same macroeconomic variables (inflation, currency, growth, volatility, pricing etc) are analyzed using economic and finance theory. There are however common mistakes that both finance and economic analysts make as a result of either using terms synonymously or generally lack of astuteness and proficiency in the area of specialization. A vivid understanding of these terms draws a tangible line distinguishing proficient from self proclaimed analysts who run the risk of misleading non-finance practitioners. We will take some time to reveal some of the common mistakes analysts make. Devaluation…
Author: The Editor
With a deepening energy crisis as drought effects thicken, Zambia’s odd of a lower credit assessment with the international credit rating agencies is narrowing. Currently rated at CCC+/CCC/Caa2 by S&P/Moody’s/Fitch, the copper producer grapples with waning sentiment as evidenced by a widening in its credit default spreads on its dollar bonds maturing 2022, 2024 and 2027 respectively. The running Eurobonds have blown out to between 1,650-2,150bps above 10 year US treasuries currency paying 1.775%. Zambia’s 2022s are paying 22.1% in bids while the longer dated 2027s are paying 18.6% in bid, the worst performing frontier market assets. Currency risks remains…
With a lean market position of K525 million into the twenty fourth treasury bill sale of the year, the central bank in Africa’s red metal producer were able to raise proceeds translating to the full amount of asset on offer plus additional 20% of their quota. The government security sale recorded K1.6 billion in appetite skewed in the usual tenor the 1yr paying 27.5% and surprisingly in the 6m bucket yielding 19%. Allocation in cash terms totaled K1.14 billion. Yields across the spectrum were unchanged save the 6 months that eased 15bps to 19%. This T-bill sale comes a day…
Gemfields subsidiary Kagem mining has embraced blockchain nano technology to trace the journey of a gemstone from the mine to consumers. These records will be a 100% encrypted. The move comes as consumers increasingly demand knowledge of gemstone origin, showing heightened interest in mindful purchasing and appreciation of the impact of consumer behaviour throughout supply chains.Gemfields earlier in 207, pioneered Gübelin’s Emerald Paternity Test, the first Provenance Proof technology – the introduction of unique DNA particles that remain within an emerald’s fissures and serve to identify a gemstones’ origin on decode – and are now marrying this advance with Gübelin’s blockchain…
Washington based lender International Monetary Fund (IMF) projects Zambia’s economic expansion to be less than 2% for 2019. The Dhaneshwar Ghura led team that visited Zambia said in a report that the copper producers macros had deteriorated due to a combination of fiscal and drought effects. The IMF team deliberated on medium term strategies on how to cure the situation while simultaneously reviewing key elements of the 2020 fiscal budget. Emphasis was placed on the need for a large, front-loaded and sustained fiscal adjustment that would help set debt on a downward path and reduce domestic arrears. Spending commitments should…
The central bank in Africa’s red metal producer Zambia on 20 November raised its benchmark interest rate by 125 basis points to 11.5% in an attempt to arrest its currency slide. The Bank of Zambia in a communique of the Governor speech expressed weariness of dislocated fiscus which has been a key theme for while. “Moreover, implementation of measures that address high fiscal deficits, debt levels, debt service as well as liquidity constraints and dismantling of arrears remains very critical to achieving overall macroeconomic stability and economic growth,” Dr. Denny Kalyalya said. The central bank remains alive to risks to…
The central bank in Africa’s second largest copper hotspot Zambia has announced a 125bps rate hike on its benchmark interest to 11.5% in a move to curb a sliding currency. Grappling with energy poverty and rising inflationary pressure two day deliberations by the monetary policy committee commenced Monday 18 November into Tuesday with the announcement made by BOZ Governor Dr. Denny Kalyalya today. Read also: Fiscal ‘inertia’ could trigger aggressive monetary policy tightening this MPC The currency has been on a one way traffic losing streak with a year to date depreciation of 17% given rising dollar demand and asset…
The monetary policy committee in Africa’s red metal producer will on Wednesday 20 November announce its monetary policy stance for the next quarter at 10.30am. Amidst a deepening energy crisis the Finance Ministry is spending $27 million monthly to plug part of a power gap through a 300MW importation from South Africa’s Eskom given receding dam levels at the Kariba, Itezhi tezhi and Kafue stations. Business pulse has lost steam with headline Purchasing Managers Index below 50 for 14 straight months. Growth is suppressed with the years forecast at 2.2%. Barely a week to the rate decision meeting the Bank…
During the 2019 budget presentation, Zambia’s Former Finance Minister Margaret Mwanakatwe had announced government plans to make state owned entities more efficient through listing on the local bourse. This was part of a revenue generation drive through boasting earning capacity of these entities through reducing dependency on the state. Two such entities targeted were the Zambia State Insurance Corporation (ZSIC) and Zambia Forestry and Forest Industries Corporation (ZAFFICO) Ltd. Listing these would not only reduce fiscal burden on the state but give citizens an opportunity to take up stake and influence running of these entities. During the Industrial Development Corporation…
Winners. The Egyptian pound (EGX) led the race with an 11.01% YTD rally as sentiment improves in the North African economy. Egypt has post the Arab spring seen improved investment fund flows in the bond and equity markets especially after the IMF granted the Egyptian economy $12 billion life line. Other winners include the Malawian Kwacha (MWK) and Nigerian Naira (NGN) which gained 0.74% and 0.64% respectively. The Uganda Shilling (UGX) rallied 0.36% YTD. Losers The Angola Kwanza (AOA) depreciated 32.5% as a consequence of devaluation by its central bank (BNA) given a volatile crude market and economic recovery out…