Good morning. Here’s what you need to know
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Zambia now in talks to restructure $3.3 billion commercial debt, following bond deal
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Africa GreenCo, GuarantCo sign $27 million facility to support Southern African renewable energy
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Kenya opts to cut spending by 12% to achieve budget balance
In Local Business and Finance News
We start the finale to the KoBold Mysteries with the conclusion of a story. Remember the great ‘Book of Knowledge and Wisdom?’ Well, here is how that story ends… In part 2, we saw how Ming’omba, in the grip of geological uncertainty, lay in limbo for decades. The site was the victim of a throttling chokehold that had rendered it unable to have, presented about it, a compelling case for the commissioning of a commercially viable mining operation. This beggars the question: Wasn’t there anything that anyone could have done? Were no solutions available to resolve the uncertainties, alleviate the situation and save Ming’omba from its paralysis? The simple answer is yes, there was, actually—and that was to conduct yet more explorations. In other words, Ming’omba needed a lot more of what had already been done before; numerous, additional exploration projects designed to connect the uncertain dots and generate an accurate definition of the structure of the ore as it lies under the earth’s surface. However, as simple as that sounds theoretically, in practical terms, Ming’omba always had an enormous limiting factor looming above it, dwarfing even the geological uncertainties that plagued it. That factor is ‘exploration finance,’ or more accurately, lack of exploration finance. Read more on Financial Insight
Zambia is in talks to restructure $3.3 billion of commercial debt, after reaching a deal with overseas holders of its sovereign bonds last week, an official said on Wednesday, as the country seeks to emerge from a three-year default. “We have already started negotiations and with some we are almost reaching there,” Secretary to the Treasury Felix Nkulukusa said at a public meeting, referring to private creditors other than bondholders. “The $3.3 billion is the money that we have to continue engaging (on) and we are engaging in good faith,” he said. Zambia reached a deal-in-principle with a group of private commercial bondholders, western asset managers and hedge funds to rework about $3 billion in international bonds on March 25, bringing it closer to finishing a complex process after multiple delays. The copper-producing country, which is dealing with a devastating drought, now needs to negotiate restructuring agreements with its other commercial creditors, having also reached a deal with official, bilateral creditors in June 2023. Read more: Reuters
A US$27 million guarantee facility has been reportedly signed to boost Southern African’s renewable energy. The agreement was signed in Lusaka on Wednesday between Africa GreenCo Group (GreenCo) and GuarantCo. Under this facility, GuarantCo would issue guarantees to Independent Power Projects (IPPs) from whom GreenCo would buy power. During the signing ceremony GreenCo’s Chief Investment Officer, Pug Bennet, said this would back the company’s payment obligations to such IPPs. Bennet stated that GuarantCo’s backing enhances their firm’s credibility in the market. “This provides significant comfort to such IPPs, and their lenders, increasing bankability and helping to attract investment in new renewable energy generation in Southern Africa,” he said. Read more: Zambia Monitor
Transport and Logistics Minister, Frank Tayali, says the desire of Zambia and Tanzania is for TAZARA as a Company to undergo a full concession. Tayali said the shareholders were open to look at various models that would make this possible. The Minister said this during the luncheon hosted by the Chinese Charge ď Affaires to Zambia, Wang Sheng at the Chinese Ambassador’s Residence on Tuesday. He stated that by so doing the concessionaire would be able to spell out in clear terms the steps they would take in the revitalisation process. “This will be in areas such as track, maintenance and improvement that will also encompass safety issues to include the signaling system,” Tayali said. The minister expressed hope that the concessioning of TAZARA would be agreed to by all parties, Tanzania, Zambia and the Chinese counterparts. Read more: Zambia Monitor
In International News
The Bank of Japan cut its economic assessment for most regions on Thursday but signalled its confidence that wage hikes were broadening, leaving scope for another hike in the country’s still-low interest rates. In a quarterly report on regional economies, the central bank said there was hope that smaller firms would hike wages by the same amount as last year or more, after bumper pay hikes were offered to employees by their bigger counterparts. “With strong wage hikes sustained for two straight years, companies are changing their behaviour to cope with rising labour costs,” such as boosting investment to streamline operations, the BOJ said. “As wage hikes broaden, many regions saw a steady increase in the number of firms that were passing on labour costs or were considering doing so,” it said. The BOJ’s regional report will be among factors the board will scrutinise in producing fresh quarterly growth and inflation forecasts at its next rate review on April 25-26. Read more: Reuters
Samsung Electronics is expected to post a near nine-fold increase in first-quarter profit from a year earlier as rebounding semiconductor prices lift earnings from a low base caused by a severe chip downturn. Operating profit for the world’s biggest maker of memory chips and TVs likely rose to 5.7 trillion won ($4.24 billion) in the quarter ended March 31, according to the average of an LSEG SmartEstimate from 27 analysts, weighted toward those who are more consistently accurate. If so, it would be Samsung’s highest profit since the third quarter of 2022. It compares with an operating profit of 640 billion won in the first quarter last year. This is because its chip division, traditionally its biggest earner, is expected to report its first quarterly profit in five quarters of about 750 billion won, according to an average estimate from 12 analysts. Memory chip prices have rebounded from a deep trough that began mid-2022 due to weak post-pandemic demand for gadgets that use the chips. Read more: Reuters
Apple is exploring the development of personal home robots after ditching its electric vehicle project, Bloomberg reported Wednesday. Engineers at Apple have been looking into a robot that can follow users around their homes and a tabletop device that uses robotics to adjust a display screen, Bloomberg reported, citing people familiar with the research team. Apple in February shut down its team working on electric cars, called Special Projects Group, another one of its moonshots. Reports of the secretive program, which employed thousands of employees, first surfaced in 2014 after Apple recruited automotive engineers among others in relevant roles. Apple’s car project was part of an internal effort to expand into new product markets. In recent years, the company has also invested heavily in products and services like its Apple Watch and Vision Pro virtual reality headset. The Vision Pro, however, will likely take years to create meaningful revenue. Apple’s hardware engineering division and its artificial intelligence and machine learning group are overseeing the work on personal robotics, Bloomberg reported. The home robot project is still in the early research and development phase, according to the report. Read more: CNBC
In line with the Kenyan president’s plan for its national budget, Kenya has opted to lower its expenditure plan for the fiscal year beginning this July by 12 percent to Ksh3.7 trillion ($28.35 billion). The president of the country, William Ruto noted that initiatives like this would help in balancing the country’s budget in the next three years. This is another development in the long list of wins the East African country has been recording. A report by the EastAfrican publication shows that the government plans to reduce its annual spending on the year starting July by Ksh3.7 trillion ($28.35 billion), a whopping 12% cut from its original budget. The idea is to continually inch towards attaining a balanced budget. Additionally, the idea is buttressed by the fact that the Kenyan Shilling, the country’s official currency and stock prices gained marginally after it successfully issued a new $1.5 billion Eurobond in February to fund the partial buyback of another bond expiring in June. Read more: Business Insider
Finally, Capital Markets News
In 117 trades recorded yesterday, 46,331 shares were transacted resulting in a turnover of K230,004.58. The following price changes were recorded yesterday: +K0.01in CEC Zambia and +K0.01 in Standard Chartered Bank Limited. Trading activity was also recorded in Airtel, CEC Zambia, National Breweries, Real Estate Investments Zambia, Zambeef and ZANACO. The LuSE All Share Index (LASI) closed at 12,766.69 points, 0.06% higher than it’s previous close at 12,759.35 points. The market closed on a capitalization of K99,737,020,324.67 including Shoprite Holdings and K64,954,334,884.67 excluding Shoprite Holdings.
16 Govt Bond trades with total face value of K114,972,000 were processed yeserday, resulting in a total turnover of K98,225,620.