Author: The Editor

Africa’s second largest copper hotspot will not implement its proposed sales tax on the 01 July as planned due to the need for time as the bill passed through different stages of parliament. This was established in an interview provided by the Finance Minister Margaret Mwanakatwe in Lusaka. The Minister said the 01 July deadline will be affected by parliament opening on the 18 June and that the bill will have to pass through various stages before enactment into tangible law. This will be the second deferral after the MinFin and the tax authorities couldn’t make 01 April deadline. Zambia…

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The central bank in Africa’s second largest copper hub, the Bank of Zambia (BOZ), on 06 June sold K725.39 million worth of treasury bills in a debt sale that saw one (1) year yields edge higher 25 bps to a record 26.50%.  Bid cover ratio was 1.26 of the K916.12 million in total bids received. Ninety eight and half percent (98.5%) of the auction allocation was housed in the one (1) year tenor amounting to K714.60 million of the K903.43 million in bids.  Kwacha yields on government securities remain elevated across the entire yield curve as markets reflect credit risks…

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Zambia’s private sector pulse for May worsened deeper into contraction zone as tough business conditions exacerbated by the May currency slide weighed the cost of doing business. According to a Markit Economics press release, the copper producers Purchasing Managers Index – PMI printed a headline of 43.9 for May compared with 45.2 in the month of April. This is the steepest slump since October 2018. Persistent headwinds such as lack of money in the economy, elevated input costs inflation continue to impact business pulse adversely. With the rate of output inflation accelerating sharply to reach a 42 month high, it…

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More so than not, the financial news is filled with erroneous reports on Vedanta Ltd. due to a lack of understanding of the Vedanta group structure.I take the time to explain the ownership structure of the Vedanta-related companies.VEDL does not own a copper mine in Zambia. In fact, it does not own any copper mines at all.Investors considering VEDL will come away with a clear understanding of the ownership structure and assets of the business. MISUNDERSTOOD OWNERSHIP STRUCTURE Almost every article that I see in the financial news related to Vedanta Resources Ltd. or Vedanta Ltd. (VEDL) treats these entities as one…

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Moody’s rating agency on 23 May effected its hints on lowering Africa’s second largest copper hub Zambia’s credit assessment. This was contained in a statement issued on its website. The sovereign rating agency cited balance sheet vulnerabilities and advised that the Caa2 rating is a reflection of the default risks on bond holders of the copper producers sovereign paper. It is also a reflection of the refinance risk of the running Eurobonds. Moody’s cites liquidity pressures as a consequence of the fiscal posture of Zambia. Read more: Zambia’s sovereign posture is exacerbating credit risk – Economic think tank Moody’s rating…

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Zambia’s emeralds earned Gemfields Mining $22.4 million in a Singaporean held gem sale held between the 14-17 May. This translated to an average price of $71.85 per carat in an auction with 35 lots on offer of which 28 accounting for 80% were sold. Zambian emeralds have earned Gemfields $589 million since 2009 which has seen 32 successful gem sales. The Singaporean auction attracted 45 entities placing bids and generating total revenues of USD 22.4 million with an overall average value of USD 71.85 per carat, an all-time record for any Gemfields emerald auction. The auction saw 72% of the…

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Zambia’s emeralds earned Gemfields Mining $22.4 million in a Singaporean held gem sale held between the 14-17 May. This translated to an average price of $71.85 per carat in an auction with 35 lots on offer of which 28 accounting for 80% were sold. Zambian emeralds have earned Gemfields $589 million since 2009 which has seen 32 successful gem sales. The Singaporean auction attracted 45 entities placing bids and generating total revenues of USD 22.4 million with an overall average value of USD 71.85 per carat, an all-time record for any Gemfields emerald auction. The auction saw 72% of the…

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A day after hiking its benchmark rate by 50 basis points to 10.25%, Zambia’s central bank successfully sold K1,052 million (at cost) worth off treasury bills. This is the second fully subscribed of the 13 auctions held so far in 2019. Of the K1,558 million in bids recorded, 67.5% were absorbed with 58.74% (K618.40 million) of appetite locked in 1 – year paper earning 26.2501% (unchanged from previous session). Other attractively priced tenors were the 9 – month yielding 25.201% that housed 20.43% (K215.61 million) of appetite recorded today. Central Bank Governor Dr. Denny Kalyalya in his MPC note on…

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Zambia’s central bank on 22 May announced a 50 basis points to 10.25% signalling the first rate hike since December 2015. Against all odds, Governor Denny Kalyalya limited the rate hike to 50 bps and left the stat reserves at 5% attributing his decision to the rising credit risks in light of the deteriorating fiscals stressing the need for realignment. Kalyalya kept track of the rising risks to inflation which his team forecasts will breach the 8% upper bound of the BOZ targeted range of 6-8%. The Governor attributed the currency slide to speculative drivers on the back of waning…

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A RATE DECISION MEETING WITH A FISCAL SKEW The central bank in Africa’s second largest copper hub will have deliberations for its second rate decision meeting of the year 2019 next week on 21-22 May. Zambia currently grapples with a currency slide quagmire amidst falling foreign exchange reserves that have weighed investor confidence thereby exacerbating asset – sell off pressure in both the foreign exchange and money markets. Market players have for the last few seeks sought clues as to what Denny Kalyalya will announce at the peak of next week’s MPC meeting. Read also: Anemic Kwacha debt sale outcomes…

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