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Zambia Sees Scope for $12.8 Billion Debt Deal Next Week
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The banking crisis will tilt US into recession this year, says Federal Reserve
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In the first week of April, bonds of total face value of K930,549,000 were transacted in 51 trades
Story of the Day
Bitcoin and the crypto revolution has been met with mixed feelings of euphoria and sadness. This is justifiable because of the many scandals, success stories, instant millionaires/billionaires, fraud, and money laundering and now constant government regulation and adoption. Additionally, crypto exchange crashes have alot of investors and speculators in awe. Is Bitcoin and cryptocurrency really a stable or predictable asset class? A couple of days ago, Elon musk was backing doge coin as a result Bitcoin rallied about $300 in a day. On the other hand FtX crypto exchange crash in the final quarter of 2022 scared a lot of investors into hitting Bitcoin prices to drop to it’s lowest price to $16,441 in November 2022 from a high of $64,000 in 2021. On 5th April 2023 it was at $28,175, which is still lower than the about $40, 000 from April 2022. There is a common saying in the traders hand book “prices fall faster than the rise” this is a testimony to that. Read more
In Local Business News Sponsored by
Zambia is a step closer to a long-awaited debt-restructuring agreement, with its official bilateral creditors set to meet April 18 after key roadblocks were resolved, the nation’s treasury secretary said. The creditors — the largest of which is China — will likely meet next week as most outstanding issues “are being addressed,” Felix Nkulukusa said in an interview in Washington Wednesday. The nation is seeking to revamp $12.8 billion in loans held by creditors including Chinese state-owned banks and eurobond holders. As the list of low-income nations struggling to service debts with rising interest rates grows, Zambia is a crucial test case of how new lenders like China can work with traditional bilateral creditors and bondholders to restructure liabilities. The main hurdles to a deal were around multilateral development banks, or MDBs, sharing the burden with bilateral creditors, as well as the involvement of foreign residents holding the nation’s local-currency bonds. The 49% reduction in the present value of their loans that Zambia’s asking creditors to accept has also caused friction. “One such issue is the question of the fair burden sharing by the MDBs, and we have seen that the MDBs have come on board,” Nkulukusa said, adding that the African Development Bank, International Monetary Fund and World Bank have made commitments. Likewise, the amount of domestic debt that foreigners hold has fallen to about $2.1 billion from $3.3 billion previously, he said. The next milestone is for the official creditors committee to sign a memorandum of understanding with the government over the restructuring. Read more: Bloomberg
Finance and National Planning Minister Situmbeko Musokotwane says the country will in the next three years start exporting fertiliser to the Southern Africa region. Dr. Musokotwane says the fertiliser manufacturing sector in Zambia has received a lot of investment which has seen its capacity grow. The Minister says the export of fertilizer will become a game changer as Zambia has been importing the commodity from abroad for many decades. In an interview with the international media on the sidelines of the ongoing Spring Meetings of the World Bank and the International Monetary Fund in Washington DC, Dr. Musokotwane said the manufacturing sector in Zambia has grown and the country is now the largest exporter of ceramics in the region. Read more: ZNBC
Zambia has posted increase in annual silver production after the release of official 2022 annual minerals production numbers. The Copper rich country has posted a gigantic jump in annual silver production, with annual 2022 production hitting 17 tons. Spot prices for Silver in February 2023 are averaging at about $700 per kilogram or $700,000 per ton, meaning that the Zambian economy would ideally be cashing or has cashed in about $11, 900 000 million if export proceeds are to be remitted back into the local Banking system. Annual silver production has jumped by 12 tons from 6 tons produced in 2021 to 17 tons produced last year in 2022. Read more: Zambian Business Times
Zambia is planning to finish tests that simulate real-world cryptocurrency usage by the end of June to help it create regulations that balance citizens’ safety with innovation, science and technology minister Felix Mutati told Reuters. The southern African country also needs digital infrastructure, including digital identities, before cryptocurrencies can be introduced, Mutati said in an interview on Wednesday. “Our main goal in the area of cryptocurrency is to strike a balance between innovation in terms of digital payments … against citizens’ safety, particularly given that cryptocurrency is very volatile,” Mutati said. “The central bank is simulating that to see what would happen in the real world. The results will assist us (in) the formulation of the regulation.” Read more: Reuters
Bank of Zambia Exchange Rates
Currency | Buying | Selling |
---|---|---|
USD | 18.8891 | 18.9391 |
GBP | 23.5395 | 23.6113 |
EUR | 20.7307 | 20.7932 |
ZAR | 1.0299 | 1.0329 |
In International Business News
The fallout from the recent banking crisis is likely to push the US economy into a mild recession later this year, according to notes from the Federal Reserve’s March policy meeting, released on Wednesday. Since November 2022, staff economists at the Federal Reserve have predicted subdued growth and a weakening economy during policy decision meetings. in March, they said the banking crisis heightened that forecast to a recession. Taking into account “the potential economic effects of the recent banking-sector developments,” Fed economists’ “projection at the time of the March meeting included a mild recession starting later this year,” noted minutes from the Fed’s most recent two-day monetary policy meeting on March 21-22. This is the first time in the current hiking cycle that staff economists have forecast such a recession. Read more: CNN
The International Monetary Fund (IMF) has projected that the economy of Sub-Saharan Africa (SSA) will grow by 3.6 per cent in 2023 and accelerate to 4.2 per cent in 2024. According to the World Economic Outlook report released on Tuesday, the growth in the region will be slower in 2023 due to the impact of the COVID-19 pandemic and the Ukraine crisis, but will recover the following year. The IMF report reveals that emerging markets and developing economies are expected to have stronger economic prospects than advanced economies, but this varies widely across regions. Read more: Business Insider
Prices are moving in a more palatable direction for US consumers. Annual inflation, as measured by the Consumer Price Index, dropped in March for the ninth consecutive month. And for the first time since September 2020, grocery prices fell on a monthly basis. Prices rose 5% for the 12 months ended in March, down from 6% in February, the Bureau of Labor Statistics reported Wednesday. Annual CPI plunged to its lowest rate since May 2021, helped by year-over-year comparisons to a period when food and energy prices spiked amid Russia’s invasion of Ukraine. Still, CPI showed some cooling on a monthly basis. The index, which measures price changes over time for a basket of goods, ticked up 0.1% from February, as compared to a previous 0.4% increase. Read more: CNN
The UK economy saw no growth in February after being hit by the effects of strikes by public sector workers, official figures show. The Office for National Statistics (ONS) said that a rise in construction activity had been offset by walkouts by teachers and civil servants. It follows a surprise 0.4% jump in economic growth in January. Despite February’s flat performance, the chancellor said the UK’s economic outlook was “brighter than expected”. Read more: BBC News
For the first time in eight years, Burundi has received $261 million from the International Monetary Fund (IMF), which will help with its economic recovery. Following their February visit to Bujumbura, the IMF team met with Mame Astou Diouf, the mission chief for Burundi. The IMF said in a statement that it has reached a staff-level agreement with Burundian authorities on a 40-month arrangement under the Extended Credit Facility (ECF) with access to $261.7 million. The ECF offers low-income countries (LICs) with ongoing balance of payments issues financial assistance over the medium term. Read more: Business Insider
Bernard Arnault, a fashion industry executive from France with a net worth of $211 billion, has surpassed the Tesla founder and CEO of Twitter to become the wealthiest person on Forbes’ 2023 billionaires list. According to Forbes, the CEO of LVMH, who is 74 years old and oversees a portfolio of more than 70 luxury brands such as Louis Vuitton, Christian Dior, Givenchy, Tiffany’s, Marc Jacobs, Sephora, and Fenty Beauty, has experienced the biggest increase in net worth among billionaires this year, adding an impressive $53 billion to his fortune over the past 12 months. Last year, Arnault surpassed the 51-year-old CEO of SpaceX, claiming the top spot on the list with $31 billion more than Musk. For the past three years, he has been third on the Billionaires list behind Musk and Amazon founder Jeff Bezos. Read more: Africa News
In the first week of April 2023 bond trading, there were four days that recorded trades during the week of which Wednesday’s bond trading was the best performing day of the week. Bonds of total face value of K930,549,000 were transacted in 51 trades, resulting in a market value sales of K619,735,240. Bonds are a low-risk investment issued when the government borrows money from its people. You can purchase bonds using the Lusaka Securities Exchange Application online. Read more
In 35 trades recorded yesterday, 7,455 shares were transacted resulting in a turnover of K19,006.22. Trading activity was also recorded in AECI, Standard Chartered Bank Limited and CEC Zambia as well as CEC Africa on the quoted tier. The LuSE All Share Index (LASI) maintainted its closed at 7,922.17 points.The market closed on a capitalization of K75,415,453,218.77 including Shoprite Holdings and K40,632,767,778.77 excluding Shoprite Holdings.
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