Daily FiZ – Friday 17/06

Story of the Day

The following is an extract from the “Acquisition of 90% Shareholding in Mopani Circular” available on the ZCCM IH investor pages that explains how the investment house structured the $1.5 billion remaining Debt in Mopani from the GIAG Facility and Carlisa Facility.

Sections 8.6 and 8.7 reads:

On completion of the Transaction, the Remaining Debt in Mopani from the GIAG Facility and Carlisa Facility will be US$1.5 billion, with the excess being waived as part of this Transaction. Read more

Local Business and Finance Sponsored By Liquid Intelligent Technologies

Zambia extended a fuel subsidy that it had been planning to scrap to get its debt under control for three months until September, the energy minister announced on Thursday. “Though government policy is not to subsidize fuel imports in an attempt to trim Zambia’s perennial fiscal deficit … the government is also acutely aware of the impact that unfettered fuel price hikes cause,” energy minister Peter Kapala said in a statement. Read more: Financial Post

Zambia’s government presented its official creditors with plan for getting its debt under control on Thursday, requesting assurances of help from them in order to unlock an International Monetary Fund support programme. Zambia, which is seeking relief on more than $17 billion of external debt, held its first meeting with official creditors on Thursday, and the International Monetary Fund urged Zambia’s them to give assurances on their “treatment” of the southern African country’s debt as a precondition of its support. Read more: CNBC

Standard Bank which trades in Zambia as Stanbic Bank says it expects the Zambian government to have a resolution in place with creditors between December 2022 and March 2023. And the Bank says since IMF funding is tied to progress on the debt restructuring, it expects the IMF will likely finalize Zambia’s programme during the second half of 2022. In a research paper, Ferishka Bharuth, Economist – Africa Regions at Standard Bank stated that creditors are facing haircuts of over 40%. Read more: Lusaka Times

Zambian President Hakainde Hichilema says trade barriers between African countries are stifling the movement of goods to the extent that countries find it easier to buy African products through Europe. On his State visit to Kenya, President Hichilema said the continent must open its borders, implement the African Continental Free Trade Area (AfCFTA) to correct the anomaly, and ease trading between countries instead of using third parties. Read more: Business Daily 

International Business and Finance Sponsored By Agricultural and Commercial Society of Zambia

The World Trade Organization’s 164 members approved a series of trade agreements early on Friday that included commitments on fish and pledges on health and food security after more than five grueling days of negotiations. The deals were ground out over five days of bargaining at a conference of more than 100 trade ministers that was seen as a test of the ability of nations to strike multilateral trade deals amid geopolitical tensions heightened by the Ukraine war. Delegates cheered after they passed the package of six agreements just before dawn on Friday. Read more: CNBC

UK interest rates have risen further as the Bank of England attempts to stem the pace of soaring prices. Rates have increased from 1% to 1.25%, the fifth consecutive rise, pushing them to the highest level in 13 years. It comes as finances are being squeezed by the rising cost of living, driven by record fuel and energy prices. Inflation – the rate at which prices rise – is currently at a 40-year high of 9%, and the Bank warned it could surpass 11% later this year. Read more: BBC News

The yen has fallen sharply after Japan’s central bank kept its ultra-low interest rates on hold as policy makers around the world hike the cost of borrowing to tackle rising prices. The Bank of Japan (BOJ) also says it will continue its programme of buying huge amounts of government bonds. The BOJ held its target for short-term interest rates at minus 0.1% and said it expected to keep borrowing costs at “present or lower” levels. Read more: BBC News

On Wednesday June 15, 2022, Nigeria’s National Bureau of Statistics (NBS) released the Consumer Price (CPI) Index report for May which showed the country’s inflation rate at an 11-month high of 17.71%; up from 16.82% in April. Prior to the release of the CPI report, The World Bank had released a report on June 14 warning that Nigeria’s high inflation problem could potentially plunge millions of Nigerians into extreme poverty. In the report titled The Continuing Urgency of Business Unusual, the multilateral lender noted that although Nigeria’s inflation problem predates the Ukrainian war, it has gotten worse since the war and is likely to deteriorate further. And this could, in turn, plunge millions of Nigerians into extreme poverty before the end of 2022. Read more: Business Insider

On Wednesday June 15 2022, Ivorian leaders met with some investors, lenders and development partners in Abidjan as they sought to raise funds in support of Ivory Coast’s recently launched 5-year development plan. According to Reuters, the meeting was a huge success, as the investors and partners pledged up to $26.1 billion. Specifically, the World Bank pledged the highest amount of $8.7 billion, followed by the European Union with €6 billion and the African Development Bank (AfDB) with $4.3 billion. Others are France with €4 billion, the Islamic Development Bank with $2 billion and the West Africa Development Bank with €1 billion. Read more: Business Insider

Capital Markets Report

In 16 trades recorded yesterday, 142,131 shares were transacted resulting in a turnover of K406,342. Trading activity was recorded in Copperbelt Energy Corporation, Standard Chartered Zambia, ZAMEFA and Zanaco. The LuSE All Share Index (LASI) maintained its close at 6,842.65 points, as there were no share price movements. The market closed on a capitalization of K70,716,532,199 including Shoprite Holdings and K35,933,846,759 excluding Shoprite Holdings.

For any feedback on the stories captured on the Daily FiZ, email Natasha on dailyfiz@fizambia.com
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