Good afternoon. Here’s what you need to know
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Zambia: AfDB Targets FDI in Infrastructure, Agriculture
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ZAFFICO reports positive performance despite challenging operating environment
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Glencore studying an approach for Anglo American, sources say
In Local Business and Finance News
ZESCO has started importing electricity to supplement the national power supply following the reduced generation due to poor hydrology. The power utility firm did not mention the source of the imported electricity which took effect on Wednesday. The imported electricity would constitute approximately 20 percent of the total available power for at least 12 months. The announcement was made by the ZESCO Spokesperson, Matongo Maumbi, in a statement issued on Thursday in Lusaka. With the imported electricity, Maumbi said ZESCO would have reduced control over the stability and scheduling of this imported power source. Read more: Zambia Monitor
Standard Chartered Bank Zambia Chief Executive Officer, Sonny Zulu, says the bank will navigate through and remain resilient by being more innovative in efforts to weather the storms of the current business environment. The pronouncement came as the bank awarded its employees a raise in salaries and wages. Zulu recalled that the financial institution had been through tough situations before which it overcame. He said this at the signing of the collective agreement with Zambia Union of Financial Institutions and Allied Workers (ZUFIAW) on Tuesday. “This year is promising to be another challenging year but we have been through this in the past. Read more: Zambia Monitor
The Zambia Forestry and Forest Industries Corporation ZAFFICO says despite a challenging operating environment in 2023, the corporation managed to perform positively. According to a statement signed by Mulawo Mwaba Company Secretary, and the Company remained focused on capital investment to achieve operational efficiencies and financial profitability, while also ensuring sustainability. ZAFFICO faced challenges such as low demand for treated poles from key customers and escalating input costs due to adverse economic conditions. However, the upward price adjustment for Roundwood, coupled with the elevated demand and introduction of a competitive and fair-trading process for selling Roundwood, contributed significantly to the company’s performance. In terms of financial results, the corporation’s gross profit for the year was ZMW ZMW287 million, representing a slight decrease of 0.3% compared to ZMW ZMW288 million in the prior year. Read more: Zambian Business Times
The African Development Bank (AfDB) has identified infrastructure development and the agricultural value chain as two investment priorities to support Zambia’s economic growth. The findings were outlined by the AfDB’s Board of Directors in the Bank’s latest Country Strategy Paper for Zambia for 2024-2029. “The first area emphasizes infrastructure development with the aim of increasing productivity, strengthening commercial competitiveness, diversifying the economy and improving people’s lives. The second supports value addition and job creation and is targeted at women and young people,” said AfDB Country Manager Raubil Durowoju. In terms of infrastructure, the AfDB will target the expansion of road and railway networks to bolster regional trade. The Bank will also focus on improving water sanitation infrastructure and quality of life by increasing access to water and sanitation. In the agricultural sector, the AfDB will support the adoption of digital solutions and climate-resilient technologies to bolster productivity and food security. The AfDB’s active portfolio in Zambia includes 23 projects with a total commitment of $1 billion. Read more: Energy Capital Power
In International News
Sales of iPhones have fallen in almost every market across the globe, according to the latest results from Apple. The technology giant said overall demand for its smartphones dropped by more than 10% in the first three months of this year, with sales falling in every geographic region except for Europe. Apple said that overall, revenues across the company declined by 4% to $90.8bn, which was the biggest drop for more than a year. Nevertheless, the results were not as bad as expected and Apple’s share price rose in after-hours trading in New York. The company said the figures were distorted by Covid-related supply disruptions, which led to unusually strong sales during the same period last year. It pledged that sales would return to growth in the months ahead, noting upcoming product launches and investments in artificial intelligence (AI). Read more: BBC News
Commodities group Glencore is studying an approach for Anglo American, two sources said, a development that could spark a bidding war for the 107-year old mining company. Glencore has not yet approached Anglo, one of the sources said. The discussions are internal and preliminary at this stage and may not result in an approach, the source added. “We do not comment on market rumour or speculation,” a Glencore spokesperson said. Anglo on Friday rejected a $39 billion all-stock proposal from the world’s No. 1 miner BHP Group. BHP’s proposed premium was 31% above Anglo’s closing price on April 23. A source familiar with the matter previously told Reuters that the Australian mining giant is considering making an improved offer. It has until May 22 to make a formal bid.
U.S. shares of Anglo American rose after the news, closing up 6.5% on the session. Glencore’s U.S. shares fell 1%. Read more: Reuters
The global economy is growing faster than expected only a few months ago thanks to resilient U.S. activity while inflation is converging more quickly than expected with central banks’ targets, the OECD said on Thursday, upgrading its outlook. The global economy would maintain the 3.1% growth rate seen last year and pick up marginally to 3.2% next year, the Organisation for Economic Cooperation and Development said, upgrading forecasts dating from February for growth of 2.9% this year and 3% in 2025. A faster than expected fall in inflation set the stage for major central banks to begin rate cuts in the second half of the year while also fuelling gains in consumers’ incomes, the OECD said in its latest Economic Outlook. However, the speed of recoveries diverged widely, the OECD warned, saying lingering sluggishness in Europe and Japan was being offset by the United States, whose growth forecast was hiked to 2.6% this year from a previous estimate of 2.1%. Read more: Reuters
Moody’s on Thursday beat Wall Street estimates for first-quarter profit, helped by demand for its research and analytics products. The New York-based company recorded robust sales of its products including CreditView. With growing expectations of the U.S. avoiding a recession, investors are increasingly spending more on analytics and data-related products to enable better investment decisions. This trend bodes well for Moody’s and its peers. Moody’s Investors Service revenue grew 35%, fueled by improved market conditions and opportunistic activity which drove strong issuance across multiple asset classes, said CFO Noemie Heuland. Revenue from the company’s analytics unit, which provides financial intelligence and analytical tools, rose about 8.4% to $802 million, from a year earlier. That helped total revenue to rise 21.5% to $1.79 billion. Read more: Reuters
The U.S. economy added fewer jobs than expected in April while the unemployment rate rose, reversing a trend of robust job growth that had kept the Federal Reserve cautious as it looks for signals on when it can start cutting interest rates. Nonfarm payrolls increased by 175,000 on the month, below the 240,000 estimate from the Dow Jones consensus. The unemployment rate ticked higher to 3.9% against expectations it would hold steady at 3.8%. Average hourly earnings rose 0.2% from the previous month and 3.9% from a year ago, both below consensus estimates and an encouraging sign for inflation. The jobless rate tied for the highest level since January 2022. A more encompassing rate that includes discouraged workers and those holding part-time jobs for economic reasons also edged up, to 7.4%, its highest level since November 2021. The labor force participation rate, or those actively looking for work, was unchanged at 62.7%. Consistent with recent trends, health care led job creation, with a 56,000 increase. Read more: CNBC
Finally, Capital Markets News
In 133 trades recorded yesterday, shares 13,845 were transacted resulting in a turnover of K101,832.09. The following share price changes were recorded yesterday: -K0.01 in Standard Chartered Bank Limited and +K0.03 in British American Tobacco Zambia. Trading activity was recorded in Airtel, Bata, CEC Zambia, Chilanga Cement, Zambia Breweries, ZANACO, Zambeef, Zambia Sugar and ZAFFICO. The LuSE All Share Index (LASI) closed at 12,850.78 points, 0.02% lower than its previous day close at 12,852.08 points. The market closed on a capitalization of K100,117,470,948.89 including Shoprite Holdings and 65,334,785,508.89 excluding Shoprite Holdings.
A total number of 11 Govt Bond trades with a total facevalue of 13,245,000 and turnover of 11,506,960 were processed yesterday.