Weekly Capital Markets Review (30th September to 4th October)
Economy, Opinion

With the month of September at an end, the “hottest month” of the year opened with bond and equity sales of K19,50 million and K199,7 thousand respectively. The corporate bond market represented 99% of all capital market activity. However, its performance has continued to be subdued due to liquidity challenges.

Equity Market Update

In the week ended 04th October 2019, a total of 243,532 shares were transacted in 89 trades, yielding a market turnover of K200,654, according to Lusaka Securities and Exchange weekly report. Trading activity was recorded in AIRTEL, CEC ZAMBIA, LAFARGE, MADISON FINANCIAL SERVICES, STANDARD CHARTERED BACK, ZANACO, ZAMBIA SUGAR and CEC AFRICA on quoted tier. The LuSE All Share Index (LASI) closed at 4,397.61 points. The market remained on a capitalization of K57,109,173,694 including Shoprite Holdings and K22,869,967,714 excluding Shoprite Holdings.

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Bond Market Update

During the week, bonds of total face value of K32,210,000 were transacted in 15 trades, yielding a market value sales of K19,557,000.

Perspective

Trading on the corporate bond market has remained largely subdued despite its continued dominance of the Zambian capital markets. At 99% in the opening week of October, the continued preference of fixed income by investors is a signal of risk aversion when it comes to investments.

The downward trajectory captured by analytics for the week by week trend analysis for September is indicative of a weakening quarter three for the bond market.

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On the equities side, week one of October saw dominance in trading for Zanaco securities which continue which are fairly priced as they have a low PE ratio. The most expensive stock traded during the week was the Airtel security, whose company recently announced that their half-year results indicated their Profit after tax would be down by 122.14% on a Year on Year basis.

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Important Announcements

Kimesh Naidoo for the BAT Zambia CEO Position

the Board of Directors of British American Tobacco Zambia Plc (“the Company” or “BATZ”) (the “Board”) wishes to announce the resignation of Mr Godfrey Machanzi as Managing Director and Executive Director of the Board effective 31 December 2019. Furthermore, the Board would like to announce the appointment of Mr Kimesh Naidoo as Managing Director Designate and Executive Director of the Board effective 26 September 2019 subject to ratification by the shareholders at the next General Meeting”.

 

Airtel 2019 Half Year Results

Airtel continues to expand investments in Zambia resulting in growth in revenues and customer base. Highlights for the first half-year 2019: • • Customer base stands at 5.789 million, up 8% Y-o-Y. • Revenues at ZMW 1,001 million, up 11.10 % Y-o-Y. • Gross profit up 11.94 % Y-o-Y to ZMW 928 MN. • Profit after tax down by 122.14 % Y-o-Y to ZMW (29) MN, mainly because of Kwacha devaluation.

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