Daily FiZ – Tuesday 19/05

Story of the Day:

Two weeks into May 2020 corporate bond trading on the LuSE, we see a turn around for the equities market as it is not completely eclipsed by the bond market as it records a 3% to 97% hopefully this time the equities market can hold its glory and not revert to the constant pattern of being completely dominated, as we saw last week. Read more 

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Zambia is seeking to restructure its debt after years of “over-ambition” in borrowing to plug an infrastructure deficit, Finance Minister Bwalya Ng’andu said. The southern African nation has stopped taking on new commercial debt and is seeking to cancel some loans that it’s contracted but not yet received, he said in an interview with the state broadcaster on Sunday. Read more: Bloomberg

Zambia’s government has again rejected Glencore’s plans to place its Mopani Copper Mines unit on care and maintenance, the Mines Minister says. Mopani said earlier this month it planned to resume mining for 90 days but then place operations on care and maintenance. Read more: Seeking Alpha

Ministry of Mines permanent secretary Barnaby Mulenga says the liquidation of Konkola Copper Mines (KCM) needs to be expedited so that the company can start making profits than having huge liabilities it is currently sitting on. And Mulenga says the government will not allow KCM to flood due to Copperbelt Energy Corporation (CEC)’s power supply restriction to the mine. Read more: News Diggers 

The price of copper has continued to recover, giving hope to Zambia, whose economy mainly depends on the metal.
The price advanced to US$5,253 a tonne on Friday on data showing a solid recovery in top consumer China and hopes of more stimulus measures to cushion the fall out of the coronavirus outbreak. Read more: Zambia Daily Mail 

Minister of Finance Bwalya Ng’andu has said that Zambia’s procurement system is flawed and needs to be overhauled. Dr. Ng’andu said that he will be taking a bill to parliament to amend the Procurement Act. Dr. Ng’andu said that he did not subscribe to Zambians being given 20% of road contracts while 80% is given to foreign contractors. Read more: Lusaka Times 

International Business and Finance 

The Economic Commission for Africa (ECA) has said that a full one-month lockdown across Africa will cost the continent about $65.7billion. This is about 2.5% of Africa’s annual GDP. The report which is titled “COVID-19: Lockdown Exit Strategies for Africa” said that this is “in addition to the wider external shock of lower commodity prices and investment flows.” Read more: Business Insider 

The chairman of the Federal Reserve says the US economy could “easily” contract by 20-30% amid the pandemic. Jerome Powell added in a CBS interview that the economic downturn might last until late 2021, and a full rebound may not be happen until a vaccine is found. Read more: BBC News 

France and Germany are proposing a €500bn ($545bn) European recovery fund to be distributed to EU countries worst affected by Covid-19. In talks on Monday, French President Emmanuel Macron and German Chancellor Angela Merkel agreed that the funds should be provided as grants. Read more: BBC News

Wall Street logged its best day in over a month on Monday as news from a Moderna trial stoked optimism about a potential coronavirus vaccine. Read more: CNBC

Japan’s economy has entered recession, and the coronavirus pandemic will likely make things even worse. The world’s third-largest economy shrank 0.9% in the January-to-March period compared to the prior quarter, according to government data released Monday. Read more: CNN

WeWork’s valuation plummeted to $2.9 billion, a far cry from the eye-popping $47 billion valuation it boasted at the start of 2019, the coworking giant’s backer SoftBank Group said today. Read more: Commercial Observer

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In 27 trades recorded yesterday, 8,056 shares were transacted yielding a market turnover of K6,775. A share price loss of K0.05 was recorded in BATA and a loss of K0.01 was recorded in Copperbelt Energy Corporation. Trading activity was also recorded in Zambia Breweries, Zanaco and ZAFFICO. The LuSE All Share Index (LASI) closed at 4,078.25 points, 0.11% down from its previous close of 4,082.86 points. The market closed on a capitalization of K56,571,643,786 including Shoprite Holdings and K22,332,437,806 excluding Shoprite Holdings.

Chart of the Day:

For any feedback on the stories captured on the Daily FiZ, email Natasha on dailyfiz@fizambia.com

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