Good morning. Here’s what you need to know
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Govt approves major fiscal, legislative reforms, appoints Deutsche Bank as fiscal agent for Zambia
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$650 million solar power project reportedly nears completion in Central Province
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Bank of England maintains interest rates
In Local Business and Finance News
Ndola Energy Company Limited (NECL), a subsidiary of GL Africa Energy, today restarted its 105 megawatt (MW) thermal power plant, injecting crucial electricity supply into the national grid and supporting Zambia’s drive to diversify its energy mix. The restart comes after successful negotiations between Ndola Energy and the Zambian government to secure an affordable fuel supply for power generation. NECL will receive 16.5 million litres of diesel through the Tazama pipeline to fire up the plant, which had been inactive since 2021 due to the closure of its traditional fuel source, the Indeni Oil Refinery. The ceremony was graced by guest of honour Minister of Energy, Hon. Peter Chibwe Kapala, who announced that the Government has implemented an innovative cost pass-through tariff mechanism approved by the Energy Regulation Board. This model eliminates the need for government subsidies by having a specified consumer cover the fuel expenses through a slightly higher tariff. Read more: Financial Insight
The government has approved the Public Debt Management Regulations, 2024, appointing an International Fiscal Agent to issue new notes for Bonds A and B. Media and Information Minister, Cornelius Mweetwa, stated that this aligned with the Public Debt Management Act, aiming to restructure Zambia’s three bonds into two new bonds to manage the country’s external debt. In a statement from Lusaka on Wednesday, Mweetwa announced that Deutsche Bank (DB) had been appointed as the Fiscal Agent for Zambia. “Deutsche Bank previously served as the fiscal agent for Eurobonds issued in 2012, 2014, and 2015, totaling $750 million, $1 billion, and $1.25 billion, respectively,” he noted. Cabinet also approved the Budget Policy Concept Paper for the 2025-2027 Medium Term Budget Plan and the 2025 Budget, outlining key principles to increase GDP annually from 2025 to 2027. Read more: Zambia Monitor
Government will soon complete the US$650 million solar power investment in Chisamba District, Central Province Permanent Secretary, Milner Mwanakampwe, has announced. Mwanakampwe said the investment on the solar power project which was at various stages of actualisation was nearing completion. He said this during a Provincial Development Coordinating Committee (PDCC) meeting held at Kwame Nkrumah University in Kabwe. He noted that the government had continued to pursue efficient energy use and attract investments in renewable energy to mitigate load shedding caused by drought. The Permanent Secretary said the solar project was one of the major projects among others, that demonstrated government’s commitment to development. “You may wish to know that in Central Province alone, we have been able to have an investment commitment in solar power amounting to US$650 million,” he said. Mwanakampwe urged heads of government departments to expedite State projects. Read more: Zambia Monitor
Finance Minister Situmbeko Musokotwane has expressed optimism that Zambia will regain its top spot as a copper mining leader in Africa. According to a statement issued by the ministry, Tuesday, Dr Musokotwane said this when he met Barrick Lumwana Country Manager Anthony Malenga, who informed him that the US$2 billion Lumwana supper-pit expansion project would commence in 2025 with a workforce of approximately 2,500. “Finance and National Planning Minister Dr Situmbeko Musokotwane says the policies and strategies which the Zambian government is implementing to Improve the performance of the mining sector and enhance its contribution to the economy, are sufficiently robust to help the country to regain its top spot as a copper mining leader in Africa” Read more: News Diggers
In International News
The Bank of England on Thursday opted to keep interest rates steady at its June meeting, but described the decision as “finely balanced” after U.K. inflation hit its 2% target. Money market pricing lifted the prospect of an August rate cut to nearly 50-50 on what investors perceived as subtly dovish messaging. The central bank’s key rate is at a 16-year high of 5.25%, where it has stood since August. Seven members of the Monetary Policy Committee voted to hold, while two favored to cut by 25 basis points. The result mirrored the vote in the May meeting. A basis point equals one-hundredth of a percentage point. In a statement, the MPC noted inflation had reached the central bank’s target and said indicators of “short-term inflation expectations” and wage growth had eased. Read more: CNBC
Nvidia has handed back the position as the world’s most valuable company to Microsoft after its share price fell by more than 3.5% on Thursday. The artificial intelligence (AI) chip giant briefly held the top spot from Tuesday, with a stock market valuation of $3.34tn. But Nvidia’s shares fell to $130.78 on Thursday, sending its value down to around $3.22tn, with Microsoft reclaiming the title as it held steady at more than $3.3tn. Nvidia’s rise has been fuelled by its dominance of what analysts call the “new gold or oil in the tech sector” – the chips that power AI. Nvidia, Microsoft and Apple – each worth more than $3tn – are in a three-horse race to be the world’s most valuable company. While Nvidia reached the top spot for just a brief period, some analysts have predicted competition between the three technology firms will remain fierce. Read more: BBC News
Japan’s factory activity expanded for a second straight month in June but the pace of growth eased as orders weakened and cost pressures intensified, a business survey showed on Friday. The au Jibun Bank flash Japan manufacturing purchasing managers’ index (PMI) stood at 50.1 in June, down slightly from 50.4 in May, but still above the 50.0 threshold separating growth from contraction on a monthly basis. “Japan’s private sector expansion stalled midway into the year,” said Jingyi Pan, economics associate director at S&P Global Market Intelligence, which compiled the survey. But growth in the manufacturers’ output offered some room for optimism, she added. The key subindex of output expanded in June for the first time since May 2023, the survey showed. However, an index of new orders dipped in June from the previous month. Read more: Reuters
Germany has fined Citigroup nearly 13 million euros ($13.94 million) for lapses in its trading system controls, the nation’s bank regulator said on Thursday, as its consumer protection division imposed its largest penalty ever. It is related to a mishap in 2022 involving $1.4 billion in mistaken sell orders in equities, an event that riled markets and for which Citigroup was already fined 61.6 million pounds ($78.24 million) by British authorities in May. Citi on May 2, 2022 processed a $444 billion order that was meant to amount to just $58 million, prompting $1.4 billion in mistaken sell orders, according to British regulators’ findings. Authorities in both Britain and Germany have said the error was a single trader’s input mistake, known as a “fat-finger” error. German regulator BaFin said that Citigroup Global Markets Europe AG had “failed to ensure that erroneous orders were not transmitted”. Read more: Reuters
Finally, Capital Markets News
In 23 trades recorded yesterday, 7,481 shares were transacted resulting in a turnover of K13,822.70. No price changes were recorded yesterday. Trading activity was recorded in Airtel, CEC Zambia, National Breweries, Real Estate Investments Zambia, Standard Chartered Bank Limited, Zambia Breweries, Zambeef and CEC Africa on the quoted tier. The LuSE All Share Index (LASI) maintained its previous day close at 13,362.20 points. The market closed on a capitalization of K111,179,658,048.25 including Shoprite Holdings and K67,701,301,248.25 excluding Shoprite Holdings.
10 Govt Bonds trade with total face value of K74,447,000 and turnover K45,417,700 were processed yesterday.