Daily FiZ – Thursday 21/03

Good morning. Here’s what you need to know

• Zambia’s $13bn debt stand-off an ‘indictment’ of global system, says president

• Zambia signs £7.1 million agreement to upgrade Nakonde Border Post

• Mopani To Be Officially Handed Over

• Fed raises GDP and inflation outlook, while keeping rate cut forecast

Video of the Day 

In Local Business and Finance News Sponsored By 

Zambia’s President Hakainde Hichilema has urged China and the bankrupt nation’s other creditors to end the stand-off over its $13bn debt restructuring, calling the delay “an indictment” of the credibility of the global system. The southern African country has become a symbol of the failures of the G20-endorsed common framework meant to expedite solutions to debt crises in poor countries. The impasse has underlined how tensions between Beijing and Washington over a range of issues are complicating negotiations on sovereign debt restructuring. Africa’s second-biggest copper producer has been in financial limbo since last year when China, its single biggest creditor, objected to a deal Lusaka had reached with private bondholders. Beijing said the agreement was unfair compared with official debt relief. Hichilema told the Financial Times that a debt deal was already “long overdue”, and it had been given greater urgency after rains destroyed much of Zambia’s maize harvest and throttled the hydropower that generates most of the country’s electricity. Creditors’ inability to agree a timely debt relief was “an indictment” on the common framework that Zambia joined in good faith, Hichilema said, adding that the principal sticking issue was “comparability” — bilateral creditors do not want to be treated too differently from private creditors. Read more: Financial Times

Zambia has entered into a £7.1 million Partner Support Agreement (PSA) with TradeMark Africa to upgrade the Nakonde One Stop Border Post, a key trade route between Zambia and Tanzania. Funded by the British government, the project would improve the flow of goods, services and people along the Dar-es-Salaam Corridor, streamline operations and reduce cargo clearance time by more than 100 percent on both sides. Currently, it takes more than two days to clear cargo trucks crossing the boarder, leading to significant delays and losses for businesses. Zambia’s Finance and National Planning Minister, Dr Situmbeko Musokotwane, signed on behalf of his country while David Beer, the Chief Executive Officer signed on behalf of the firm during the launch of the programme in Lusaka on Wednesday. During the launch, Musokotwane highlighted the projects potential to upgrade infrastructure, decrease congestion and improve trade flows across the region. Read more: Zambia Monitor

The UK has today (21 March) pledged £6 million to bolster Zambia’s efforts to protect forests, reduce poverty and tackle climate change. This funding boost will curb rapid agricultural expansion of uncultivated land, such as natural forests and woodlands, and support the rollout of climate-smart agriculture practices among smallholder farmers – helping them to strengthen food security. Local farmers will learn the benefits of rotating and diversifying crops, efficient irrigation and agroforestry – the planting of trees alongside crops – to help improve skills and education. This is part of the UK’s wider efforts to protect and restore nature around the world. It builds on the historic agreement at COP26 under the UK’s presidency, to halt and reverse forest loss by 2030 – covering 90% of the world’s forests. It also follows the £500 million announced by the government at COP28 to tackle deforestation and increase investment in sustainable land management. Read more: UK Government

Chief Government spokesperson Cornelius Mweetwa, says the handover of Mopani Copper Mines to Delta Mining Limited, will help to further stabilize the Kwacha against other major convertible currencies. Mr. Mweetwa says the operationalisation of Mopani will not only bring stability to the Kwacha against the dollar and other convertible currencies but also increased copper production. President, Hakainde Hichilema, is tomorrow scheduled to officially handover the Mopani Mines to Delta Mining Limited, a subsidiary of International Resource Holdings. Mr. Mweetwa who is also Information and Media Minister was speaking in Livingstone at the Zambia Institute of Public Relations and Communications –ZIPRC- 2024 Annual Conference. Meanwhile, Mr. Mweetwa has challenged public relations and communication specialists, especially those in local authorities, to enhance the visibility of the Constituency Development Fund –CDF- projects and other empowerment programmes. He said this will promote accountability and citizen engagement. Read more: ZNBC

Bank of Zambia Exchange Rates

In International News 

The US central bank has left its key interest rate unchanged again, while it looks for more evidence that inflation is coming under control. The decision kept the target range for the Federal Reserve’s influential rate in the range of 5.25%-5.5%, the highest in more than two decades. The Fed is debating whether higher borrowing costs have done enough to ease the pressures pushing up prices. Officials said they still expected to cut rates by the end of the year. But after raising borrowing costs aggressively in response to soaring prices in 2022, the bank is proceeding cautiously.  Forecasts released after the meeting showed that officials expect the economy to grow 2.1% this year, a significantly more rosy outlook than the 1.4% they projected in December. The forecasts also showed officials expect inflation to fall to 2.4% by the end of the year, approaching the 2% rate the bank wants to see. Mr Powell said officials were not overly concerned by some recent data, which has suggested that progress might be stalling. Read more: BBC News

Boeing will report a massive loss in the first quarter stemming from the Alaska Airlines door plug blowout on January 5, Chief Financial Officer Brian West said at an investor conference Wednesday. The beleaguered company said its commercial airplane unit’s operating profit margin would plunge to around -20%. That would be the biggest loss margin at the Boeing unit in two years, since the company had been forced to halt deliveries of its 787 Dreamliner because of other quality issues at that time. This time, the 737 Max production has been slowed because of the door plug that blew off of a 737 Max 9 on an Alaska Air flight soon after takeoff, leaving a gaping hole in the side of the jet. Shares of Boeing, a component of the Dow Jones industrial average, were down about 2% in premarket trading on the guidance. Read more: BBC News 

South Africa’s inflation has shot up to its highest level in four months, which might make the central bank more likely to keep interest rates steady at its next meeting. In February, the consumer price index surged to 5.6% year-on-year, up from 5.3% in the previous month, according to a statement by Pretoria-based Statistics South Africa on Wednesday. Per the report, the rise in the annual inflation rate was driven by increases in food, housing, transport, and miscellaneous goods and services, which also cover medical insurance. The South African Reserve Bank, which targets inflation of between 3% and 6%, will announce a monetary policy decision next week. Read more: Business Insider

The rally in gold continues with prices hitting an all-time high on Thursday — and there’s room for it to rise more as central banks continue to purchase bullion in record amounts.  Prices could rise to $2,300 per ounce in the second half of 2024, especially against the backdrop of expectations that the U.S. Federal Reserve could cut rates in the second half of 2024, Aakash Doshi, Citi’s North America head of commodities research, told CNBC. Gold is currently trading at $2,203. Gold prices tend to share an inverse relationship with interest rates. As interest rates dip, gold becomes more appealing compared to fixed-income assets such as bonds, which would yield weaker returns in a low-interest-rate environment. Read more: CNBC

Finally, Capital Markets News

In 93 trades recorded yesterday 52,283 shares were transacted resulting in a turnover of K265,002.75. The following price changes were recorded yesterday: -K0.18 in AECI, +K0.01 in CEC Zambia and +K0.01 in ZANACO. Trading activity was also recorded in Airtel, Standard Chartered Bank Limited, Zambia Breweries, Zambeef and ZAFFICO. The LuSE All Share Index (LASI) closed at 12,523.26 points, 0.00% lower than it’s previous close at 12,523.69 points. The market closed on a capitalization of K96,893,464,504.59 including Shoprite Holdings and K62,110,779,064.59 excluding Shoprite Holdings.

29 Govt Bond trades with total face value of K220,744,000 were processed today resulting in a total turnover of K185,200,170.

Picture of the Day

This week, Government launched the 2024 early maize harvest in Mkushi, Central Province.