Here is a list of market events to watch out for in Zambia this week beginning the 02 December.
PMI RELEASE: Markit Economics will release Purchasing Managers Index (PMI) readings for African nations including Zambia on Wednesday 04 December. Zambia’s PMI readings for November is expected to slide deeper into contraction to between 46-47 from 48.3 in October on account of effects of power outages and liquidity bottlenecks. Zambia has been in the woods for 14 months now. Manufacturing firms continue to bear the brunt of power outages and a generally elevated energy cost environment both on electricity and fuel cost side.
KWACHA BEARS: The copper currency has been under pressure from insatiable dollar demand to fund energy and agricultural sectors coupled with asset sell off pressure exacerbated by waning sentiment given a deteriorating fiscal posture. The central banks weak reserve position has incapacitated their role to stabilize currency as they manage the risk of not depleting import cover. The Kwacha is expected to trade bearishly in anticipation of dollar demand from offshores that could not get bigger yields on Friday 29 November auction that will opt for capital flight in dollar repatriation of their Kwacha liquidity this week.
T-BILL INVESTMENT: The central bank will look to raise K950million in treasury bills on Thursday 05 December as the MinFin aggressively tries to reign in on a fiscal deficit target of 6.5% which is unlikely given the currency macroeconomic fundamentals. Surplus units searching for yield will target the 1yr tenor yielding 27.5% while shorter dated tenors earn 27% in the 9 months.
The Kwacha Arbitrageur