Good morning. Here’s what you need to know
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AfDB loans Zambia $13.2 million to improve access to drinking water, sanitation
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Multi Facility Economic Zone reportedly records K3.5 million profit after tax in 2023
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J.P.Morgan raises odds of US recession by year end to 35%
In Local Business and Finance News
The Board of Directors of the African Development Fund has granted a loan of US$13.2 million to Zambia to implement innovative measures and improve access to drinking water. This is also meant to improve sanitation and hygiene for 460,000 people in Kabwe and Bauleni, Lusaka. Additionally, the project approved this month, aimed to strengthen the resilience of the beneficiary populations to the effects of climate change. In addition to the funding from the African Development Bank Group’s concessional loans window, the project is being supported by the European Union, the Bank Group’s strategic partner, with a grant of US$6.05 million through their Nexus Energy and Water Programme for Zambia, a transformative initiative under the European Union’s Global Gateway strategy. Read more: Zambia Monitor
Lusaka South Multi Facility Economic Zone (LSMFEZ) says it recorded an improved financial performance in 2023 with a profit of K3.5 million after tax compared to K2.8 million recorded in 2022. LMMFEZ Chairperson of the board of directors, Boster Chitaba said the profits marked the third consecutive Year that the company was declaring a dividend. He said this in Lusaka on Wednesday when LMMFEZ delivered a dividend of K1.5 million cheque to its shareholder, Industrial Development Corporation (IDC) December 31, 2023. “The company made dividend payments of ZMW 1, 200, 888 and ZMW 2, 000, 000 for the years 2021 and 2022 respectively,” he added. He pointed out that this made the total dividend payout to K6 million. “We attribute this success to the unwavering support from our shareholders – IDC,” he stated. Read more: Zambia Monitor
Zambia’s proposed minerals regulation law could deter investment and deliver a “fatal blow” to its goal of raising annual copper output to 3 million metric tons, two mining bodies said on Wednesday. Zambia, Africa’s second biggest copper producer, is proposing a Minerals Regulation Commission Bill that would allow the government to acquire a shareholding in exploration areas before licences to search for minerals including copper are granted to investors.
The proposed law, seen by Reuters on Wednesday, seeks to give the nation’s minister of finance the right to maintain a shareholding in a mining license on behalf of the government if minerals are discovered. But Zambia’s Chamber of Mines (ZCM), the main mining industry body, and the Association of Zambian Mineral Exploration Companies (AZMEC) said in a joint statement some parts of the proposed law “will drive up the perception of investment risk” in the country. “(With) the prospect of forced ‘free carry’ acquisitions by the state of stakes in new ventures, this Bill will seriously undermine property rights,” the mining industry bodies said. Zambia’s mines ministry was not immediately available to comment. Read more: Mining
Tertiary Minerals’ Zambian subsidiary, Copernicus Minerals, has entered a binding letter of agreement (BLA) with First Quantum Minerals concerning the Mukai Copper Project in Zambia. The agreement grants First Quantum a 24-month exploration due diligence period. During this time, First Quantum is committed to funding a minimum of $1.5m in exploration expenditures, with at least $500,000 allocated for the first year, known as Phase 1. Upon successful completion of the initial exploration, First Quantum may opt to earn a 51% stake in the Mukai exploration licence. This is contingent on the identification of a mineral resource containing at least 80,000 tonnes of copper within an additional 24 months, referred to as Phase 2. Read more: Mining Technology
In International News
J.P.Morgan has raised the odds of a U.S. recession by the end of this year to 35% from 25% probability earlier, citing easing labor market pressures. Fears of a U.S. recession following a weaker-than-expected July jobs report and an unwinding of yen-funded carry trades sparked a sharp sell-off in global equities earlier this week. Markets are currently pricing a 100% chance of a 50 basis points interest rate cut in September by the Federal Reserve, according to CME’s FedWatch tool. “U.S. wage inflation is now slowing in a manner not seen in other DM economies,” economists at the Wall Street brokerage, said in a note on Wednesday. “Easing labor market conditions increase confidence both that service price inflation will move lower and that the Fed’s current policy stance is restrictive,” they added. J.P.Morgan expects the Fed to “break from gradualism” stance and lower interest rates by at least 100 bps through the end of the year. Read more: Reuters
The United States overtook China as Germany’s biggest trading partner in the first half of 2024, according to preliminary German statistics office data, as Berlin’s drive to reduce dependency on Beijing takes shape amid a resilient U.S. economy. German imports and exports to the world’s largest economy totalled around 127 billion euros ($139 billion) from January to June, while for China the figure was 122 billion euros, according to Reuters’ calculations based on the data. The U.S. had already overtaken China in the first quarter, after 2023 was the eighth year in a row that China remained Germany’s number one partner, by a few hundred millions. The shift comes as Germany has said it wants to shrink its exposure to China, citing political differences and accusing Beijing of “unfair practices”, though it has been vague on policy steps. Read more: Reuters
US stocks wavered Wednesday, giving back earlier gains as investors tried to recover from the week’s bruising losses. The Dow fell 234 points, or 0.6%, after gaining more than 400 points earlier in the day. The S&P 500 declined 0.8% and the Nasdaq Composite lost 1.1%. CNN’s Fear & Greed Index, which measures seven barometers of market sentiment, closed in “extreme fear” territory. The Cboe Volatility Index — Wall Street’s fear gauge — which measures bets on expected stock market volatility, fell to 27. Oil prices rose on Wednesday. West Texas Intermediate crude futures, the US benchmark for oil, settled at $75.23 a barrel. Brent crude futures, the international benchmark, settled at $78.33 a barrel. Japanese stocks rose 1.2% on Wednesday, extending their rally after the benchmark Nikkei 225 index on Monday saw its largest daily percentage drop since 1987. Japan was also hit hard by the appreciation of the yen after its central bank last week raised interest rates for the second time in 2024. Read more: CNN
Kenya’s President William Ruto must be feeling punch-drunk – after suffering another blow to his plans to raise taxes for his cash-strapped, debt-burdened government. After the recent widespread anti-tax protests – that saw parliament set alight – he bowed to public pressure and withdrew his finance bill for the coming year. But then last week the appeals court torpedoed his tax plans from last year. Three judges unanimously ruled the 2023 legislation that had raised taxes on salaries, fuel and mobile money transactions was “fundamentally flawed” and “unconstitutional” as it had not followed laid down procedures. Both moves pose challenges for government’s ability to raise extra cash to fund the national budget and service its $78bn public debt. Ndindi Nyoro, the chairman of the parliamentary budget committee, told the BBC the latest ruling might cause significant shortfalls in this year’s budget and limited the government’s ability to run its affairs. Read more: BBC News
Finally, Capital Markets News
In 267 trades recorded yesterday, 131,092 shares were transacted resulting in a turnover of K4,505,106.40. The following price changes were recorded yesterday: -K0.01 in CEC Zambia, -K0.35 in Standard Chartered Bank Limited, -K0.02 in Zambeef and -K0.01 in ZANACO. Trading activity was also recorded in Airtel, Real Estate Investments Zambia, ZAMEFA, Zambia Reinsurance and Zambia Sugar. The LuSE All Share Index (LASI) closed at 14,331.53 points, 1.21% lower than its previous day close at 14,4507.48 points. The market closed on a capitalization of K117,899,606,405.28 including Shoprite Holdings and K74,421,249,605.28 excluding Shoprite Holdings.
4 Govt Bond trades with total quantity K61,692,000 and turnover K37,744,050 were processed yesterday.
