Good afternoon. Here’s what you need to know
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Bank of Zambia rakes in $1.4 billion through Export Proceeds Tracking Framework
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Billionaire-backed KoBold, Midnight Sun team up for Zambia copper discovery
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Anglo American to sell De Beers, Amplats to fend off BHP’s bid
In Local Business and Finance News
A perfect three-pronged storm of economic challenges is brewing for central bankers. The Bank of Zambia is faced with a hat-trick of rising inflation, a depreciating currency, and an increasing overnight interbank lending rate. The economic headwinds pose a serious hurdle for central bankers, necessitating a hawkish policy stance to tame inflation and stabilise the currency. However, a widening divergence between the overnight interbank rate and the policy rate reveals a banking sector struggling with Kwacha shortages and liquidity crunches, complicating monetary policy decisions. Read more on Financial Insight
KoBold Metals, a US-based startup supported by high-profile investors such as Bill Gates and Jeff Bezos, is venturing into Zambia’s rich copper belt. In February it partnered with Canada’s Midnight Sun Mining (TSXV: MMA) to explore the promising Dumbwa target within the Solwezi copper project. This strategic alliance will leverage KoBold’s advanced data science techniques and Midnight Sun’s extensive local experience. The goal is for KoBold to earn a 75% stake in the Dumbwa target by investing $15 million in exploration and making $500,000 in cash payments over 4.5 years. “Partnering with KoBold allows us to explore this vast property with the necessary capital and expertise,” Midnight Sun’s marketing and communications director Adrien O’Brien told The Northern Miner’s Energy Transition Metals Summit in Washington, D.C. in April. “Their tech-driven approach combined with our local knowledge creates a powerful synergy aimed at unlocking Dumbwa’s full potential.” Read more: Mining
The Bank of Zambia (BoZ) has said US$1.4 billion has so far been received through the Export Proceeds Tracking Framework. This is a facility compelling all export earnings to be reflected in an account at a bank domiciled in Zambia. The framework, being implemented by the BoZ and the Zambia Revenue Authority (ZRA) came into effect on January 1, 2024. Giving an update on how much has come through since it came into effect. BoZ Deputy Bank Governor-Operations, Francis Chipimo, when giving an update on how much had so far been raked in, said about US$1.4 billion had been received in the system. Read more: Zambia Monitor
Zambia and Rwanda have signed an agreement on technical cooperation on provision of mass affordable and decent housing across the country. The agreement would support raising awareness on important housing development issues through collaboration in hosting national housing fora and similar events. The events would be aimed at promoting decent housing, settlement improvement, social-economic development, employment creation, climate resilience and sustainable communities. Infrastructure, Housing and Urban Development, Minister. Charles Milupi, signed on behalf of Zambia while Rwandan Minister of Infrastructure, Dr Jimmy Gasore, signed on behalf of his country in Lusaka on Friday. “The agreement is informed by the goodwill that both governments have demonstrated in uplifting the living standards of their peoples, especially in the areas of informal settlement upgrading and mass affordable housing ,” Milupi said. Read more: Zambia Monitor
In International News
Anglo American, the takeover target of mining giant BHP, has ceded to pressure from investors, announcing plans to sell some of its legacy assets in an attempt to protect itself from current and future bids. The sweeping break up plan, disclosed on Tuesday, will see Anglo American sell its diamond business De Beers, its South Africa-based Anglo American Platinum — Amplats — (JSE: AMS) and its steelmaking coal assets. The company, which rejected on Monday BHP’s $43 billion second offer, is keeping its copper, iron ore and crop nutrients businesses. Anglo American owns three of the top 10 producing copper mines in South America, with ample room for growth. It is also a main producer of premium iron ore, which has historically accounted for the lion’s share of Anglo’s profit. The company plans to decrease investments in its recently acquired fertilizers business from £1 billion ($1.26bn) to £200 million ($251m) in 2025. The next step will be to find strategic investors who can support the resumption of full-scale operations at the Woodsmith polyhalite project, starting in 2026, chief executive Duncan Wanblad said. Read more: Mining
The Dow Jones Industrial Average closed above the 40,000 mark Friday for the first time in its 139-year history. The blue-chip index initially crossed the key threshold early Thursday but ended that day lower. Wall Street has been boosted in recent days by renewed hopes of rate cuts from the Federal Reserve that would loosen monetary conditions for consumers and businesses. A report this week from the Bureau of Labor Statistics indicated that inflation has started to ease, potentially paving the way for the central bank to start implementing the rate cut that investors have been expecting since the start of the year. Read more: CNN
China has launched an anti-dumping probe into imports of a widely used plastic from the US, EU, Taiwan and Japan. The announcement from the Ministry of Commerce that Imports of polyoxymethylene copolymer -which is used in electronics and cars – is a signal that China will hit back in its trade disputes with the US and Europe. The announcement comes as China’s trade rows with the US and the EU have deepened in recent months. Less than a week ago, Washington sharply increased tariffs on Chinese goods, including electric vehicles (EVs), solar panels and computer chips. The new US moves also expanded on sweeping border taxes that were imposed on Chinese goods under the Trump administration. In response, China’s commerce ministry said the new moves would “severely affect the atmosphere for bilateral cooperation”, and criticised what it characterised as the politicisation of economic issues. Read more: BBC News
China’s factory output topped forecasts in April, helped by improving external demand, although retail sales unexpectedly slowed and the property sector remained a drag on the economy, piling pressure on Beijing to do more to support growth. A mixed set of data on Friday followed other indicators for April that showed a patchy recovery in the world’s second-largest economy, with trade and consumer prices perking up but credit growth mired by weak consumer confidence. Industrial output grew 6.7% year-on-year in April, National Bureau of Statistics (NBS) data showed, accelerating from the 4.5% pace seen in March and above the 5.5% increase tipped in a Reuters poll of analysts. However, retail sales rose just 2.3%, the slowest increase since December 2022, off the 3.1% increase in March and far short of the forecast 3.8% rise. Read more: Reuters
Finally, Capital Markets News
In 80 trades recorded on Friday, 397,486 shares were transacted resulting in a turnover of K1,907,008.44. No share price change was recorded on Friday. Trading activity was recorded in Airtel, British American Tobacco Zambia, CEC Zambia, Chilanga Cement, PUMA, Standard Chartered Bank Limited, Zambia Breweries, Zambeef, ZANACO and Zambia Sugar. The LuSE All Share Index (LASI) maintained it’s previous day close at 12,871.39 points. The market closed on a capitalization of K100,209,892,991.00 including Shoprite Holdings and K 65,427,207,551.00 excluding Shoprite Holdings.
A total of 10 Govt Bond trades with total face value of 39,437,210 and turnover 24,137,730 were processed on Friday.