Good morning. Here’s what you need to know
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BOZ sold K8.5billion in ‘Stat’ Bonds as 40% of Cash Reserves Can be Bond Collateralized
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GOOGLE Enters Zambian ICT Space
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China car firms seek 25% tax on EU – state media
In Local Business and Finance News
Zambia sold K8.5 billion in 2,3 and 5 year bonds, in a private placement offering on 05 June 2024. The bonds This bond sale comes in the wake of the inclusion of government securities as the newest asset above cash in the computation of statutory reserves. The Bank of Zambia has recorded a series of under-subscriptions in government security sales (to date) as markets grapple with the aftermath of tight liquidity following the 9% hike in cash reserve requirement to 26% on 05 May. This sterilization measures mopped the markets of excess liquidity which dented financial institutions purchasing power to fill up auctions. In a memo issued to commercial banks, the BOZ will now permit the use of government securities up to 40% of the cash reserve ratio to be held as part of statutory reserves. Read more: The Business Telegraph
American technology giant Google, has signed a Memorandum of Understanding with Zambia’s Ministry of Technology and Science which will see the construction of a Center of Excellence in digital transformation, innovation, offering skills development and knowledge sharing. Google through it’s subsidiary, Google Cloud, has entered the Zambian market to revolutionize the Information and Communication Technology (ICT) sector following incentives given by government a year ago. Speaking at the signing ceremony in Lusaka, Google Cloud Director Global Strategic Initiatives, Manuel Greisinger said the company is connecting Zambia to UMOJA, a fiber optic project which will run from Kenya through South Africa to Australia. Mr. Greisinger stated that UMOJA will help Zambia adapt fast to artificial intelligence so that government services and private sector work can be enhanced. Read more: Money FM
Zambia has reached an initial agreement with the Tanzanian Government to import 650,000 metric tonnes of white maize. Updating the country on Cabinet resolutions, Chief Government Spokesperson Cornelius Mweetwa said this is in a bid to boost the white maize stocks in the country. Mr. Mweetwa, who is also Minister of Information and Media, revealed that Zambia has also received support amounting to US$13.31 million under the Relief Cash Option, adding that so far 92,515 households have since been targeted to receive the support. He further disclosed that with regards to food relief, 44,286.5 metric tonnes of white maize has so far been distributed to drought affected districts to avert hunger. “Of this amount 3,706 metric tonnes has been distributed under the Maize for the vulnerable component, while 12,013 metric tonnes has been distributed under the Food for Work component.” “Under the Community Sales, 360,317.87 metric tonnes of white maize has been sold as at 7th June, 2024,” Mr. Mweeta stated. Read more: Money FM
The African Export-Import Bank (Afreximbank) has called for a transformative shift in how African countries conduct trade and finance. Haytham El Maayergi, the bank’s Executive Vice President for the Global Trade Bank, emphasized the necessity of moving away from dependence on global currencies like the United States (US) dollar and instead promoting intra-African trade using local currencies. EI Maayergi was responding to a question from the Zambia Monitor about how current global trends impact trade dynamics in Africa and the strategies African businesses should adopt. Speaking in Nassau, Bahamas on the current predicament, he said: “When Kenya wants to trade with Egypt, for instance, both countries wait for dollars to start importing from each other. “This dependence on the dollar affects availability, exchange rates, and exerts unnecessary pressure on our currencies. We need to change this system.” Afreximbank is spearheading the Pan-African Payment and Settlement System (PAPSS), which aims to facilitate trade within Africa using local currencies. Read more: Zambia Monitor
In International News
Chinese car companies have called on Beijing to hit European Union rivals with import taxes of up to 25% if the trading bloc imposes tariffs on vehicles from China, the country’s state media has reported. The demand was reportedly made at a closed-door meeting organised by China’s Ministry of Commerce, which was also attended by representatives of European car firms. The measures would target cars from the EU with large petrol-driven engines. Last week, the EU threatened Chinese electric vehicle (EV) makers with tariffs of up to 38% from 4 July. The meeting in Beijing was attended by four Chinese and six European car companies, according to an article published by a social media account affiliated with state broadcaster CCTV. German car making giant Volkswagen has confirmed to the BBC that it was present at the meeting but declined to comment on what was discussed. Other European companies that were reportedly present, including BMW and Porsche, did not immediately reply to the BBC’s requests for comment. Read more: BBC News
The Swiss National Bank on Thursday trimmed its key interest rate by 25 basis points to 1.25%, continuing cuts at a time when sentiment over monetary policy easing remains mixed among major economies. Two thirds of economists polled by Reuters had anticipated the SNB would decide in favor of a 25-basis-point-cut to 1.25%. The country’s inflation flatlined at 1.4% in May after a bump up in April and is expected to average the same level across full-year 2024, according to the SNB’s latest projections. The Swiss central bank expects the national GDP, adjusted for sporting events, to hit 1.2% this year. It anticipates support from exports but ongoing pressure from “low capacity utilization in industrial production and high financing costs,” which are likely to subdue investments. Read more: CNBC
Global fossil fuel consumption and greenhouse gas emissions hit record highs last year, even as renewables generated more energy than ever before, an industry report has found. Fossil fuel consumption rose 1.5 percent compared with 2022, while emissions increased 2.1 percent, the Statistical Review of World Energy report showed on Thursday. At the same time, renewables’ share of energy consumption hit 14.6 percent, up 0.4 percent from the previous year. Nick Wayth, CEO of the Energy Institute, said that while demand for fossil fuels is peaking in advanced economies, economic development and improvements in quality of life in emerging economies continue to drive fossil growth. “The progress of the transition is slow, but the big picture masks diverse energy stories playing out across different geographies,” Wayth said in a foreword to the report. The Global South accounted for 56 percent of total energy consumption, with its use growing at twice the rate of the global average, the report said. Read more: Al Jazeera
Toyota Chairman Akio Toyoda and nine other members of the automaker’s board were re-elected at an annual general meeting on Tuesday, with shareholders shrugging off concerns about governance and certification test scandals. Two leading proxy advisers had recommended against Toyoda’s re-election. But his re-appointment was widely expected given shareholdings in the automaker owned by other Toyota group firms, record business results and his popularity among Japanese retail investors. That said, any big drop in shareholder support for Toyoda – a figure which will be released on Wednesday – will not only be embarrassing but could spur further action on governance reforms. Analysts have cited an acceleration of efforts to unwind cross-shareholdings as one possible outcome. Toyoda’s approval rating fell to 85% last year from 96% in 2022. Since then, the world’s biggest automaker has been bedevilled by a spate of safety and other certification testing violations at group firms including small car maker Daihatsu as well as at its parent company. Read more: Reuters
Finally, Capital Markets News
In 78 trades recorded yesterday 81,493 shares were transacted resulting in a turnover of K471,439.08. The following price changes were recorded yesterday: +K0.13 in CEC Zambia, +K16.00 in Shoprite and -K0.08 in ZANACO. Trading activity was also recorded in Airtel, Real Estate Investments Zambia, Standard Chartered Bank Limited, Zambia Breweries, Zambeef, Zambia Sugar, ZAFFICO and CEC Africa on the quoted tier. The LuSE All Share Index (LASI) closed at 13,362.20 points, 0.16% higher than its previous day close at 13,340.86 points. The market closed on a capitalization of K111,179,658,048.25 including Shoprite Holdings and K67,701,301,248.25 excluding Shoprite Holdings.
11 Govt Bonds trade with total face value of K30,508,000 and turnover K18,907,720 were processed yesterday.