Good morning. Here’s what you need to know
-
Zambia strikes preliminary deal on $3 bln international bond rework
-
Zambia Bonds Gain as Moody’s Sees Debt Talks Unlocking Growth
-
Boeing CEO Dave Calhoun to step down
In Local Business and Finance News Sponsored By
Zambia said on Monday it had reached agreement with a group of private creditors on restructuring $3 billion of its international bonds in a major step that brings the country closer to emerging from its long-delayed debt rework. The latest deal proposes swapping Zambia’s three existing instruments into two amortising bonds, one of which would deliver higher repayments if the country’s economic outlook and capability of dealing with its debt burden improve. “History has been made!,” President Hakainde Hichilema said on social media platform X. “We are pleased to announce the agreement with our Eurobond holders.” Read more: Reuters
Zambia’s dollar bonds strengthened as the country worked to finalize a long-delayed debt restructuring, with Moody’s Investors Service saying a deal would be a catalyst for broader economic reforms. The price of Zambia’s debt due 2027 gained for a sixth day to the highest since May 2022, rising 0.1 cents on the dollar to 72.637 cents at 12:09 p.m. in London on Monday. Parties to negotiations that started last week expect to conclude a deal for $3 billion of global bonds within days, people familiar with the matter said at the time. Read more: Bloomberg
President Hakainde Hichilema says the 3.5 billion United States dollar agreement with Eurobond holders marks an economic turnaround for Zambia. President Hichilema says the agreement has created space for Zambia to move resources meant for debt repayments to developmental economic needs. The Head of state has since thanked the Zambian people for their patience stating that his administration is doing everything possible to better their lives. President Hichilema said this after the announcement of the debt agreement that the country has secured with bondholders Meanwhile The World Bank says Zambia’s agreement with its Eurobond holders is a major milestone in the country’s economic transformation agenda. Read more: ZNBC
The International Monetary Fund- IMF- has welcomed the agreement between Zambia and bondholders to restructure the Eurobond debt. An IMF Spokesperson says the agreement is consistent with the parameters of the IMF programme. And, According to X monitored by ZNBC News, British High Commissioner to Zambia, Nicholas Woolley has applauded all those involved in securing the debt deal. Mr. Woolley says the deal is a major achievement for Zambia and for the G20 Common Framework debt process. Read more: ZNBC
Zambia and Zimbabwe are said to be retendering a US$5 billion project to build a hydropower plant they previously awarded to General Electric Co. and Power Construction Corp. of China. According to a Bloomberg report tracked by Zambia Monitor on Monday the two countries expect to select new bidders by September next year, quoting an official. ZRA Chief Executive Officer, Munyaradzi Munodawafa, was quoted saying he expected to receive bids from potential developers by April 2025 and select bidders five months after that. Work on the 2,400-megawatt Batoka Gorge project was initially scheduled to begin in 2020, but it encountered several delays, including the onset of the Covid-19 pandemic and difficulties in securing funding. Read more: Zambia Monitor
Industrial Development Corporation (IDC) Chief Executive Officer Cornwell Muleya says it gives a bad perception of the IDC in people’s eyes that some of its subsidiary companies are incurring losses, attributing these losses to the legacy debt that most entities are facing. And Muleya says as the IDC Board Chair, President Hakainde Hichilema does find time to meet and discuss with the members. He adds that in the Gulf Cooperation Council, one would find that for the countries which have experienced rapid growth, the chairman of such entities is the head of state. Meanwhile, Muleya says there is no law that has been breached regarding the Mopani-International Resources Holding RSC Limited (IRH) transaction. Read more: News Diggers
In International News
Boeing boss Dave Calhoun will leave at the end of this year amid a deepening crisis over the firm’s safety record. Boeing also said that the head of its commercial airlines division will retire immediately while its chairman will not stand for re-election. The firm is under pressure after an unused door blew out of a Boeing 737 Max in January shortly after take-off. No-one was injured but the firm’s safety and quality control standards came under renewed scrutiny. Mr Calhoun took on the chief executive role in early 2020 after the previous boss, Dennis Muilenburg, was ousted in the aftermath of one of the biggest scandals in Boeing’s history. Read more: BBC News
The EU has announced investigations into some of the biggest tech firms in the world over uncompetitive practices. Meta, Apple, and Alphabet, which owns Google, are being looked into for potential breaches of the Digital Markets Act (DMA) introduced in 2022. If they are found to have broken the rules, the firms can face huge fines of up to 10% of their annual turnover. EU antitrust boss Margrethe Vestager and industry head Thierry Breton announced the investigations on Monday. Just six companies have obligations under the DMA, but they are also the world’s largest tech firms: Alphabet, Apple, Meta, Amazon, Microsoft and ByteDance. Read more: BBC News
The decision to include Indian government bonds in two prominent global indexes recently is being viewed as a shot in the arm for the rapidly growing country and is expected to bring in billions of inflows. India’s bonds will be added to the JPMorgan Government Bond Index-Emerging Markets (GBI-EM) in June, the Wall Street lender announced in September. The JPMorgan inclusion is reportedly India’s first ever inclusion in a global bond index. Earlier this month, Bloomberg Index Services’ followed suit, announcing it will be adding Indian government bonds to its Emerging Market Local Currency Government Index from Jan. 31, 2025. Read more: CNBC
Global bank messaging network SWIFT is planning a new platform in the next one to two years to connect the wave of central bank digital currencies now in development to the existing finance system, it has told Reuters. The move, which would be one of the most significant yet for the nascent CBDC ecosystem given SWIFT’s key role in global banking, is likely to be fine-tuned to when the first major ones are launched. Around 90% of the world’s central banks are now exploring digital versions of their currencies. Most don’t want to be left behind by bitcoin and other cryptocurrencies, but are grappling with technological complexities. Read more: Reuters
Finally, Capital Markets News
In 236 trades recorded yesterday 63,820 shares were transacted resulting in a turnover of K715,455.85. The following price changes were recorded yesterday: +K0.02 in CEC Africa on the quoted tier and -K0.01 in Zambeef. Trading activity was also recorded in Airtel, CEC Zambia, Chilanga Cement, Standard Chartered Bank Limited, ZANACO and Zambia Sugar. The LuSE All Share Index (LASI) closed at 12,517.27 points, 0.01% lower than it’s previous close at 12,517.96 points. The market closed on a capitalization of K96,952,618,229.67 including Shoprite Holdings and K62,169,932,789.67 excluding Shoprite Holdings.
9 Govt Bond trades with total face value of K280,537,000 were processed yesterday, resulting in a total turnover of K238,326,050.