Good afternoon. Here’s what you need to know
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Maamba Collieries Limited Expands Power Generation Capacity in Zambia from 300MW to 600MW
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Zambia’s 2024 economic growth projections to drop by almost 50%
- European Central Bank cuts interest rates for the first time since 2019
In Local Business and Finance News
Maamba Collieries Limited (MCL), a subsidiary of Nava Bharat Ventures Limited, is set to double its power generation capacity from 300 megawatts (MW) to 600 MW. This expansion, which falls under Phase II of MCL’s development plan, will involve the addition of 2 x 150MW (300MW) power units. During a board meeting held on 29th May, the Board of Directors of Nava Bharat Ventures took note of the proposal and approved the equity commitment required for this expansion. The project’s estimated cost is USD 400 million, with an equity commitment of USD 100 million. This equity will be contributed by Nava Bharat Singapore Pte Ltd (NBS), which will provide USD 65 million, and ZCCM Investment Holdings Plc (ZCCH-IH), which will contribute USD 35 million. Read more: Lusaka Times
The Centre for Trade Policy and Development (CTPD) is calling on the government to urgently develop an Oil Exploration and Production (EP) Policy. Since the inception of the Petroleum (Exploration and Production) Act, 2008 (No. 10 of 2008),there has been no significant investment in oil and gas exploration in Zambia. Attracting exploration funds to Zambia, with its largely unproven hydrocarbon prospectivity and considerable geological risk, has proven difficult. However, neighboring countries with similar geological characteristics, such as Zimbabwe, Mozambique, and Namibia, have achieved impressive results in oil and gas exploration. Zambia has conducted three licensing rounds to attract private investment in the sector, with twelve out of fifty-six blocks under license and six actively explored. To date, none of these exploration activities have reported any success, largely attributed to a lack of serious funding commitments. Read more: Lusaka Times
President Hakainde Hichilema has announced that the Cabinet will be taking the 2024 budget for review to address the debt and climate-induced economic crisis. Finance and National Planning Minister, Situmbeko Musokotwane, also emphasized that measures were being implemented to provide economic relief through various interventions. “Cabinet has agreed to take the 2024 budget amendment bill to parliament next week for realignment to tackle the current economic environment,” President Hichilema told journalists during a press conference in Lusaka on Wednesday. He noted that the government was looking forward to making budget changes to respond to the economic crisis caused by climate change, among other factors. Read more: Zambia Monitor
Zambian authorities have revised the country’s economic growth forecast for this year, projecting a slowdown to 2.7 percent from the earlier estimate of around five percent. The Finance and National Planning Minister, Dr Situmbeko Musokotwane, attributed this downturn to several factors, including drought and a power deficit. Speaking at the Zambia Association of Manufacturers (ZAM) pre-budget meeting in Lusaka on Thursday, Musokotwane reassured the nation that the slowdown in economic growth and activities was temporary. He also cited foreign exchange volatility and the adverse effects of climate change, which have led to food and energy insecurity, as contributing factors. “The slow growth is temporary as various industries are coming up, with the government attracting expansions and investments in several economic sectors, including mining,” Musokotwane assured. The Minister highlighted several developments expected to boost the economy, such as increasing copper production to at least 1.5 million metric tonnes by 2026, investing in more mines and creating employment opportunities. Additionally, Musokotwane expressed optimism that the government would conclude the debt restructuring process before the end of this year. Read more: Zambia Monitor
In International News
The European Central Bank on Thursday confirmed a widely-anticipated reduction in interest rates at its meeting in Frankfurt, despite lingering inflationary pressures in the 20-nation euro zone. It takes the central bank’s key rate to 3.75%, down from a record 4% where it has been since September 2023. Money markets had fully priced in the 25 basis point move lower at the June gathering. It is the first cut since September 2019, when the deposit facility was in negative territory. Read more: CNBC
Nvidia’s market value has surged past $3tn, lifting the chip giant ahead of Apple to become the second most valuable publicly listed company in the world. The firm’s share price rose more than 5% on Wednesday, to more than $1,224. It extended a breathtakingly rapid climb that started last year, powered by bets that the US firm is positioned to be a major winner from a wave of investment in artificial intelligence (AI). Its market value now sits just behind Microsoft, another key player in the industry thanks to its investments in Chat GPT-maker OpenAI. Valued at “just” $2tn as recently as February, Nvidia sparked a new wave of share purchases after it announced plans last month for a so-called stock split. The move will increase the number of shares by a factor of 10 and reduce their value accordingly, a change aimed at making shares more affordable to small-time investors. Read more: BBC News
The Bank of Canada has trimmed its key policy rate by 25 basis points to 4.75 percent, in a widely expected move that marked its first cut in four years, and said more easing was likely if inflation continued to ease. After keeping interest rates at a more than two-decade high of 5 percent for almost a year, on Wednesday the BoC said the indicators for underlying inflation looked increasingly positive. “With further and more sustained evidence underlying inflation is easing, monetary policy no longer needs to be as restrictive,” Governor Tiff Macklem said in his remarks after the announcement. Read more: Al Jazeera
The U.N. Secretary General called for a tax on profits of fossil fuel companies to help pay for the fight against global warming. He spoke from the American Museum of Natural History in New York. “Already this year, a brutal heatwave has baked Asia with record temperatures, shriveling crops, closing schools and killing people. Cities from New Delhi to Bamako to Mexico City are scorching….here in the U.S., savage storms have destroyed communities and lives.” “We have seen drought disasters declared across southern Africa, and the extreme rates flood the Arabian Peninsula, East Africa and Brazil.” Guterres appealed to media and tech companies to stop taking advertising from its biggest players, as has been done in some places with the tobacco industry. During his speech on World Environment Day, he repeated his concerns about subsidies paid out in many countries, which help keep prices low for consumers. “Climate change is the mother of all stealth taxes paid by everyday people and vulnerable countries and communities,” he said. “Meanwhile, the godfathers of climate chaos, the fossil fuel industry, rake in record profits and feast off trillions in taxpayer funded subsidies.” Read more: Africa News
Finally, Capital Markets News
In 229 trades recorded yesterday 51,644 shares were transacted resulting in a turnover of K 545,019.69. The following price changes were recorded yesterday: K0.02 gain in CEC Zambia and K0.04 loss in Zambeef. Trading activity was also recorded in AECI, Airtel, Chilanga Cement, Pamodzi, Real Estate Investments Zambia, Standard Chartered Bank Limited, Zambia Breweries, ZCCM, ZAMEFA, ZANACO, Zambia Sugar and CEC Africa on the quoted tier. The LuSE All Share Index (LASI) closed at 13,114.67 points, 0.03% higher than its previous close of 13,110.11 points. The market closed on a capitalization of K101,373,612,552.02 including Shoprite Holdings and K66,590,927,112.02 excluding Shoprite Holdings.
6 Govt Bond trades with a total face value of K54,672,000 and turnover K33,137,560 were processed yesterday.
