Good morning. Here’s what you need to know
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Japan gives Zambia $2m aid towards drought response
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Izwe’s profit swell to K190 million, but questions linger
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Bank of Zambia defends 10 years penalty for using foreign currency in domestic transactions
In Local Business and Finance News
Izwe a subsidiary of the Izwe Africa Group, an international financial solutions group that operates in Zambia with its headquarters are located in Mauritius, has posted about K200 million profit after tax for the year ended 2023. Despite these hefty profits, some customers have questioned the institutions business practices in Zambia and the jury is still out if their operations are above board. According to the audited financial statement seen by the Zambian Business Times – ZBT, Izwe exceeded its profit after tax estimate for the year 2023 increasing by 44% to ZMW190 million compared to a profit after tax of ZMW132.0 million reported in the prior year. The Company’s gross revenue in the Zambian market also has balooned by 37% to ZMW600.1 million attributed to an increase in customers. “The Company continued to diversify its funding sources, with borrowings increasing by 79% to ZMW1.0 billion to fund the increase in demand from clients.” Read more: Zambian Business Times
The Zambia power utility Company ZESCO has subcontracted Sinohydro a Chinese state-owned hydropower engineering and construction company to construct a 100 megawatts solar power plant in Chikonkome ward of Chisamba District of Central Province. Chisamba District Commissioner DC has exclusively confirmed the development, indicating that the completion of the construction of the 100MW will take a maximum of 2 years. Questions have emerged on the contractual terms and the amounts that are to be paid to Sinohydro on this particular project. Mboyoma however could not reveal the total budget for the project adding that ZESCO will be in a better position to give out contractual terms and the amounts that are to be paid. Read more: Zambian Business Times
The Bank of Zambia (BoZ) has defended its 10-year penalty for using foreign currency in domestic transactions, asserting that it is mandated by law. However, the Central Bank clarified that the penalty would only be imposed following due legal process, including court proceedings. BoZ Governor, Dr. Denny Kalyalya, addressed this during the Monetary Policy Rate announcement meeting in Lusaka on Wednesday. “The 10-year penalty is stipulated in the law for de-dollarisation. Offenders must go through the court process before facing such a penalty,” Kalyalya said. Responding to queries about the progress of currency regulation consultations with stakeholders, particularly regarding de-dollarisation, he noted that these consultations were proceeding smoothly. Read more: Zambia Monitor
Japan has given Zambia an emergency grant aid of $2 million as urgent food assistance to the regions most affected by drought in the country. According to a statement issued by Deputy Chief of Mission at the Embassy of Japan in Zambia, Ominato Satoshi, Thursday, the aid would be directed towards providing emergency food assistance to approximately 8,400 most vulnerable households. “The government of Japan has decided to provide emergency grant aid of 2 million US Dollars as urgent food assistance to the regions most affected by the drought in Zambia. This funding will be utilised through the World Food Programme (WFP) to improve nutrition and food security for those facing a food crisis,” stated Satoshi. Read more: News Diggers
In International News
Alibaba Group Holding missed market expectations for first-quarter revenue on Thursday, as the company’s domestic e-commerce sales came under pressure from cautious spending by Chinese consumers in a faltering economy. A halting economic recovery in China coupled with a persistently weak property market and high job insecurity levels have sapped consumer confidence and spending power in the world’s No. 2 economy, hitting global firms across the board. The Chinese e-commerce titan is expected to report net profit of 28.31 billion yuan, equivalent to $3.95 billion, for the three months ended June, according to the consensus estimate of 15 analysts polled by FactSet. That would compare with net profit of 34.33 billion yuan a year earlier and 3.27 billion yuan in the March quarter. First-quarter revenue was likely 247.54 billion yuan, according to FactSet, up from 234.16 billion yuan a year ago and 221.87 billion yuan in its fourth quarter. The company’s Hong Kong-listed stock has risen 4.0% this year after gaining 0.4% in the June quarter. Read more: Market Watch
US Stocks rallied on Thursday as investors regained confidence in the economy following encouraging consumer and labor data that helped ease recession worries. The Dow Jones Industrial Average leaped 554 points, or 1.39%, to end the day at 40,563.06. The S&P 500 closed up 1.61% at 5,543.22, for its sixth straight gain. The broad market index has advanced roughly 8% from its intraday bottom on Aug. 5. The Nasdaq Composite jumped 2.34% to 17,594.50. Encouraging inflation data this week had largely swept away investors’ recessionary fears prior to Thursday’s swath of economic data, and led to a rebound in equities following last week’s sharp global sell-off. Read more: CNBC
China’s factory output slowed for a third straight month in July, showing the recovery in the world’s second-largest economy was losing steam, although the battered consumer sector perked up slightly as stimulus targeting households took effect. A mixed batch of data on Thursday pointed to a patchy start to the second half for the $19 trillion economy and gave policymakers continued cause for concern following dismal export, prices and bank lending indicators earlier this month. Data from the National Bureau of Statistics (NBS) showed industrial output grew 5.1% from a year earlier, slowing from the 5.3% pace in June and below analysts’ forecasts for a 5.2% increase. In contrast, retail sales rose 2.7% in July, quickening from a 2.0% increase in June and beating expectations for growth of 2.6%. Overall, analysts say the data steps up the urgency for policymakers to roll out more support measures aimed at consumers instead of pouring funds into infrastructure. Read more: Reuters
TikTok told a federal appeals court, on Thursday that the U.S. Department of Justice has misstated the social media app’s ties to China, urging the court to overturn a law requiring China-based ByteDance to sell TikTok’s U.S. assets or face a ban. TikTok, which has sued to overturn the law, said the Justice Department has made factual errors in the case. The department’s lawyers said last month that the app poses a national security risk by allowing the Chinese government to collect the data of Americans and covertly manipulate what content they see. TikTok said on Thursday it is undisputed that the app’s content recommendation engine and user data are stored in the U.S. on cloud servers operated by Oracle, and that content moderation decisions that affect U.S. users are made in the U.S. Signed by President Joe Biden on April 24, the law gives ByteDance until Jan. 19 to sell TikTok or face a ban. The White House says it wants to see Chinese-based ownership ended on national security grounds, but not a ban on TikTok. Read more: Reuters
Finally, Capital Markets News
In 24 trades recorded yesterday, 3,021 shares were transacted resulting in a turnover of K23,701.26. The following price changes were recorded yesterday: +K0.02 in CEC Zambia and +K0.01 in Standard Chartered Bank Limited. Trading activity was also recorded in Chilanga Cement, Madison Financial Services, Real Estate Investments Zambia, Zambia Breweries, Zambeef, ZANACO, Zambia Sugar and CEC Africa on the quoted tier. The LuSE All Share Index (LASI) closed at 14,369.95 points, 0.08% higher than its previous day close at 14,358.96 points. The market closed on a capitalization of K118,071,444,826.11 including Shoprite Holdings and K74,593,088,026.11 excluding Shoprite Holdings.
15 Govt Bond trades with total quantity K212,677,000 and turnover K141,998,650 were processed yesterday.
