Good afternoon. Here’s what you need to know
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Zambia unveils crop diversification plan to enhance food security, strengthen household incomes
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China stocks surge toward best week since 2008
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OPEC+ set to go ahead with Dec oil output hike, sources say
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Copper and Silver prices surge
In Local Business and Finance News
The government has launched the National Crop Diversification Strategy (NCDS) to promote crop diversity, enhance household food and nutrition security, and increase household incomes. Minister of Agriculture, Reuben Mtolo, Phiri said the launch marked a significant milestone in Zambia’s path toward sustainable agriculture and rural development. He made the remarks on Thursday in Lusaka during the launch at the International Institute for Tropical Agriculture (IITA) Research and Administrative Hub. “Our crop diversification strategy is built on the understanding that a single-crop economy is vulnerable to climate change, market fluctuations, and soil degradation,” Mtolo stated. He restated government’s commitment to supporting local farmers from seed to market, offering training, credit and market access to ensure their success. The Minister further highlighted that crop diversification was a critical step towards building a sustainable, resilient and prosperous agricultural sector. Read more: Zambia Monitor
The worst drought in more than a 100 years is testing Zambia to the limit and will require its finance minister to devise an annual budget that can recharge an economy that’s still emerging from a bruising debt restructuring. The 2025 spending plan Situmbeko Musokotwane will unveil at about 2:15 p.m. in Lusaka, the capital, will be one of the “greatest challenges” he faces in his term. It will pique the interest of investors who agreed to have their debt reworked in recent months. They will be seeking clarity on what the lingering impact of the drought might mean for how much they get repaid in coming years. It will also draw the attention of businesses and households who will want to hear what plan Musokotwane has to revitalize the economy and fix an energy crisis. To meet the challenges Musokotwane will use funds from multilateral institutions. The government has sought additional help from the International Monetary Fund and World Bank. In June, the IMF agreed to lend Zambia an extra $388 million. Hichilema is also hoping for a new catastrophe credit line from the World Bank that could amount to about $140 million. One bright spot is Zambia’s copper mining industry. Operators including First Quantum Minerals Ltd. have overcome the power shortages with imports. Though that’s come at a higher price, the nation managed to grow first-half copper output by 6.3% compared to a year ago. Read more: Bloomberg
Minister of Water Development and Sanitation has disclosed that Commercial Water utility companies are losing an average of K1.5 million per month as a result of the current water shortage which has resulted in reduced sales. Delivering a ministerial statement in Parliament, Collins Nzovu says the reduction in sales has been coupled with low water tariffs of an average of K9 per cubic meter, against an average unit cost of recovery of about K13.9, thereby making it difficult for utilities to sustain their operations. Engineer Nzovu states that the drying up of water sources and load shedding owing to the drought, has resulted in reduced water supply especially in Lusaka, Katete, Kasempa, Solwezi and Kaoma. He says as one of the mitigation measures, government will construct 100 boreholes in all drought affected areas. Read more: MoneyFM
The US Government has announced an additional 73-million United States dollars to support democratic development in democracy delivers partner countries, which includes Zambia. USAID Administrator Samantha Power says the new funding is going to support priorities like public service delivery in Ecuador, Malawi, and Zambia. Ms. Power says part of the money will also go countries such as Moldova, and Nepal to enhance democratic governance and anti-corruption. She said this during the Democracy Delivers Event which was attended by Foreign Affairs and International Cooperation Minister, Mulambo Haimbe on the sidelines of the 79th Session of the United Nations General Assembly in New York. Read more: ZNBC
Consumer Unity Trust Society (CUTS) Board member Sajeev Nair has observed that the country forgets to implement planned power projects whenever it experiences good rainfall but only turns to enjoying. Speaking during a News Diggers organised Public Discussion Forum on load-shedding recently, Nair said the 2024 power crisis was peculiar because it was so rampant, diverse and had a far-reaching impact. “Load-shedding or power management or insufficient power this is not the first time we are facing it. It has been going on; if you look at 2015, 2016, 2017 and 2018 we had this but then what makes the 2024 power peculiar [is] because it is so rampant. It is so diverse and it also has a far reaching consequences.” Read more: News Diggers
In International News
An abrupt move by China’s leaders to prime the economy with stimulus has produced a powerful rally in the country’s stocks, which have posted their biggest single-week gain in nearly 16 years. On Friday, the CSI 300 index of big Chinese companies traded in Shanghai or Shenzhen rose 4.5 percent and was up 15.7 percent this week. The gain was the largest in a single week for the index since November 2008, when share prices were gyrating violently with the onset of the global financial crisis. The volatile Hang Seng Index in Hong Kong, which includes a range of companies with activities in Hong Kong and in mainland China, was also up 12.8 percent this week. Sharp gains in China could shore up public confidence, at least temporarily, as the Chinese economy faces broadly falling prices, weak retail sales and a housing meltdown. The government has been trying to rebuild confidence to persuade consumers and home buyers to start spending money. On Tuesday, China’s top financial regulators announced a package of measures, including interest rate cuts and requiring smaller mortgage down payments. One of the changes took effect on Friday: allowing commercial banks to lend a larger proportion of their assets. Read more: New York Times
The Organization of the Petroleum Exporting Countries and its allies will go ahead with a planned oil production increase in December but first need to cut output to address overproduction by some members, two OPEC+ sources said on Thursday. The sources said the plan didn’t represent any major change from existing policy after the Financial Times reported Saudi Arabia is committed to OPEC+ raising production on Dec. 1 and dropping its unofficial $100 a barrel oil price target to win back market share. OPEC and Saudi Arabia have repeatedly said they do not target a certain price and make decisions based on market fundamentals and in the interest of balancing supply and demand. The output increase in December is not about regaining market share, it is about a small number of countries phasing out their voluntary output cuts, one of the OPEC+ sources said. OPEC+, which groups OPEC members and allies such as Russia, is scheduled to raise output by 180,000 barrels per day in December. Iraq and Kazakhstan have pledged to cut 123,000 bpd in September to compensate for earlier pumping above agreed levels. Read more: Reuters
PayPal Holdings announced on Wednesday it is enabling U.S. merchants to buy, hold and sell cryptocurrency from their business accounts. Cryptocurrency has moved from being a nascent asset class towards greater market acceptance after bitcoin exchange traded funds were approved for listing by the U.S. SEC earlier in the year. “Business owners have increasingly expressed a desire for the same cryptocurrency capabilities available to consumers,” said Jose Fernandez da Ponte, Senior Vice President of Blockchain, Cryptocurrency, and Digital Currencies at PayPal. PayPal joined the cryptocurrency market in 2020, allowing customers to buy, sell and hold bitcoin and other virtual coins using the digital payments company’s online wallets. The company became the first major financial technology firm to embrace digital currencies for payments and transfers when it launched its dollar-backed stablecoin in August 2023.Read more: Reuters
The global financial architecture needs a permanent mechanism for restructuring sovereign debt, as measures currently in place have fallen short for creditors and borrowers alike, the head of the U.N. Trade and Development agency told Reuters. A raft of recent defaults from Zambia to Ethiopia have fuelled a debate about how to ensure that countries in distress can achieve a swift and smooth debt restructuring that would help them return to a path of growth and rising investment. “What has happened is that there are ad-hoc mechanisms put in place when the problem comes, (but) there is no permanent institution or system that is there all the time dealing with debt restructuring,” UNCTAD Secretary-General Rebeca Grynspan said on the sidelines of the U.N. General Assembly in New York. Talk of a sovereign debt restructuring mechanism is not new. The International Monetary Fund (IMF) spearheaded a push in the early 2000s but that did not gain traction, Grynspan said. Read more: Reuters
China’s industrial profits plunged by 17.8% in August from a year ago in their largest decline in more than a year, National Bureau of Statistics data showed Friday. That followed a 4.1% year-on-year increase in July, the fastest pace in five months. Industrial profits data covers factories, mines and utilities in China. The 17.8% drop was the steepest since an 18.2% drop in April 2023, according to official data accessed through Wind Information. The statistics bureau attributed the large decline in August to a high base in the year ago period. In August 2023, the same monthly figure expanded 17.2% from a year ago. The drop dragged down industrial profits for the year. In the first eight months of the year, profits at large industrial firms grew by 0.5% to 4.65 trillion yuan ($663.47 billion), compared with a 3.6% increase in the first seven months. Read more: CNBC
Silver reached its highest level since 2012, driven by expectations of additional interest rate cuts from the Federal Reserve, boosting demand for precious metals. The white metal climbed as much as 2.8% to $32.71 an ounce on Thursday, extending its gain for the year to 37%. This surge follows a broad rally in precious metals, with gold hitting another all-time high. Silver has become one of the year’s best-performing major commodities, benefiting from the Fed’s pivot toward easier monetary policy last week and the prospect of further rate cuts, which support non-yielding metals like silver. Read more: Mining
The copper price rose above $10,000 a tonne on Thursday on the back of new China stimulus measures for the real estate market. Copper for December delivery increased by 3.4% from Wednesday’s settlement, reaching $4.64 per pound ($10,208 per tonne) in early morning trade on the Comex in New York. The official Xinhua News Agency reported that China’s Politburo aims to stabilize the real estate market, calling for “forceful” rate cuts to stop its decline. Bloomberg previously reported that China is considering a $142 billion capital injection into its largest state banks. This move by the Politburo follows the central bank’s introduction of its largest stimulus package since the pandemic, intended to lift the economy out of its deflationary phase and push it toward the government’s growth target. Further boosting sentiment, data showed that the US economy has rebounded from the pandemic in stronger shape than previously estimated. “Policy risks from the US have clouded the outlook for base metals, as well as the timing of the recovery in global growth,” Citigroup said in a note. The bank highlighted concerns about a potential softening in the US labor market, uncertainty surrounding the upcoming US presidential election, and weakness in manufacturing. Earlier this month, analysts at Bank of America (BofA) projected copper price would rise above $10,000 per tonne by 2025. BofA said the copper price remains strong due to high demand, constrained supply and increased investment in energy transition projects. “Manufacturing activity should stabilize as the Fed cuts rates, so we maintain our constructive copper view into 2025,” the bank’s analysts said. Mining stocks also surged. Glencore rose as much as 5.8% in London, while BHP gained 4.8%, and Freeport-McMoRan increased by 7.5% in New York. Read more: Mining
Finally, Capital Markets News
In 194 trades recorded yesterday 70,504 shares were transacted resulting in a turnover of K2,197,770.92. The following price changes were recorded yesterday: -K0.08 in Bata, -K0.03 in CEC Zambia, +K31.00, +K0.14 in Zambeef. Trading activity was also recorded in AECI, Chilanga Cement, Madison Financial Services, Pamodzi, PUMA, Real Estate Investments Zambia, Standard Chartered Bank Limited, Zambia Breweries, Zambia Reinsurance, ZANACO and Zambia Sugar. The LuSE All Share Index (LASI) closed at 15,968.97 points, 0.02% lower than its previous day close. The market closed on a capitalization of K166,524,907,650.02 including Shoprite Holdings and K81,742,111,890.02 excluding Shoprite Holdings.
A total of 4 Govt Bond trades with a total quantity of K1,516,000 and turnover K888,360,000 were processed yesterday.