Weekly Capital Market Review (23rd to 27th November 2020)  
Economy, Opinion

Four weeks into November 2020, bond trading. We revert back to our old pattern of the bond market completely dominating the equities market recording a 100% on the bond market to 0% on the equities side. The financial year ended 30th September 2020 was characterized by a difficult operating environment, particularly in the second half of the year, due to adverse macro-economic fundamentals worsened by the Covid-19 pandemic. The significant depreciation of the Zambian Kwacha against the US Dollar had an adverse impact on the pricing of imported production inputs and financing costs on a majority of company securities’, dollar denominated loans. The combined effects of depressed customer spending and a weakening currency impacted the most of the securities’ results. An example is ZAMBEEF, despite the challenges noted above, Zambeef achieved significant revenue and operating profit (EBIT) growth compared to the previous financial period. This achievement, in the face of adverse economic and market conditions, demonstrates the Group’s fundamental strength as a diversified and therefore resilient business.

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Equity Market

In the week ended 27th November 2020, a total of 3,611,043 shares were transacted in 61 trades, yielding a market turnover of K2,800,434. Trading activity was recorded in AEL ZAMBIA, CEC ZAMBIA, LAFARGE, PUMA, REI ZAMBIA, STANDARD CHARTERED ZAMBIA, ZAMBEEF and ZANACO. The Index (LASI) closed at 3,804.37 points. The market closed on a capitalization of K57,036,948,374including Shoprite Holdings and K22,797,742,394 excluding Shoprite Holdings.

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Bond Market

Bonds of total face value of K949,478,000 were transacted in 7 trades, resulting in a market value sales of K621,272,000.

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Important accouchements  

ZAMBEEF PRODUCTS PLC 

As stated on 28 October 2020, the Group was pleased to announce that it expected to report audited dollar denominated revenue and EBITDA that is in line with current market expectations, with EBIT and adjusted Profit Before Tax* that are over 25% ahead of current market expectations. The Group is pleased to confirm this remains the case.

ZCCM INVESTMENTS HOLDINGS PLC (“ZCCM-IH”) 

In compliance with the requirements of the Securities Act No 41 of 2016 and the Lusaka Securities Exchange (“LuSE”) Listings Requirements (the “Rules”), shareholders are informed that on 11 November 2019, KHL filed a Request for Arbitration in London against ZCCM-IH (as Respondent) and KMP (as Nominal Respondent). These Arbitration proceedings are strictly confidential as between the parties. The Arbitration proceedings follow a criminal complaint made by ZCCM-IH against the allegedly unauthorised transfer by KMP of KMP monies to a KHL related party/affiliate.

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