Weekly Bond Market Diary (23rd to 27th November 2020)
Economy, Opinion

Four weeks into the month of November 2020 bond trading, bonds of total face value of K949,478,000 were transacted in 7 trades, yielding a market value sales of K621,272,000. Only three days recorded trades of which Wednesdays’ bond trading was the best performing for the week.

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Bonds are traded publicly, which means we can observe the price traders are paying for Zambian debt. Since 2013 Zambia’s bond that is due to repay 2022 has been bought and sold for less than its face value, because speculators have thought there is a chance Zambia might default.

A trader who bought Zambia’s 2022 bonds in August 2018 will make around 75% profit if they receive all interest and principal payments in full. A trader who bought the same bond in March 2020 will make 200% profit. A trader buying Zambia’s 2027 bond now could make 250% profit if every interest and principal is made.

The original private lenders  to Zambia lent at high interest rates of 5.375% to 8.97% because it was high risk lending. Many of the current owners of these debts bought them at low prices because it was expected that Zambia would not be able to repay the debts in full. The logic of private lenders behavior is that significant amounts of the debt would need to be cancelled.

 Monday 23rd

There were no bonds traded today.

Tuesday 24th

Bonds of total face value of K7,250,000 were transacted in 1 trade, resulting in a market value sales of K5,366,620.

Wednesday 25th  

Bonds of total face value of K912,013,000 were transacted in 1 trade, resulting in a market value sales of K599,999,670.

Thursday 26th  

There were no bonds traded today.

Friday 27th

Bonds of total face value of K30,215,000 were transacted in 5 trades, resulting in a market value sales of K15,906,000.

Powered by Financial analytics Zambia.

  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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