Good afternoon. Here’s what you need to know
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2024 Nickel production surpasses 6,000 tons
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Bank of Zambia launches Financial Stability Report to avoid speculative behaviour on country’s financial firmness
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US dollar’s dominance secure, BRICS see no progress on de-dollarization -report
In Local Business and Finance News
Zambia has seen a surge in nickel production, reaching 6,282 metric tons from January 2024 to April 2024. This increase marks an upturn from the 249 metric tons produced within the same period in 2023, representing an advancement of about 2, 000 percent. According to a consolidated copper production report, in April 2024, Zambia’s nickel production surged to 1,991.6147 metric tons, demonstrating an escalation from the preceding months. In March, the production stood at 1,635.6386 metric tons, 1,580.4499 metric tons in February and 1,074.7349 metric tons in January 2024, indicating a consistent upward trajectory in nickel production. Zambia’s Nickel production has increased from 249 metric tons produced in 2023 to 6, 282 metric tons from January 2024 to April 2024. Read more: Zambian Business Times
The Bank of Zambia (BoZ) has launched the first ever Financial Stability Report which will analyse past and current developments in the sector. Using the Financial Stability Report (FSR), the Central Bank aims to manage potential speculative behaviour on the fiscal steadiness in the country while managing stakeholders’ expectations on the sector. The Bank would have the opportunity to gauge market participants perception of risks and vulnerabilities and enhance its analysis of financial stability risks, according to the BoZ Governor, Denny Kalyalya, at the launch of the report in Lusaka. Kalyalya pointed out that decisions of FSC would be data driven and risk based. Additionally, he said, the Bank would start collecting qualitative data directly from financial intermediaries through the Financial Stability Survey. Read more: Zambia Monitor
Government says it plans to use part of the funds in the K41.9 billion supplementary budget to settle the debt owed to Glencore, the former owners of Mopani Copper Mines (MCM). While the main matter for the supplementary budget was to deal with the effects of drought in Zambia, it would also be used to fund the hanging debt. This is according to the Finance and National Planning Minister, Situmbeko Musokotwane, during ZNBC’s Sunday Interview. In 2020, government nationalised MCM by acquiring 90 percent of the shares at US$1.5 billion through an off-take with Glencore. During the interview, Musokotwane outlined other sectors that would require support from the K41.9 billion supplementary budgets, including the MCM deal. He recalled that when Glencore left, the firm had requested for US$1.5 billion. Read more: Zambia Monitor
United States Agency for International Development (USAID) Zambia has called for removal of taxes on Liquefied Petroleum Gas (LPG) Cylinders and stoves as the government finalizes the 2025 national budget in a bid to transition from charcoal usage. Making a submission during the National Consultations for the 2025 budget & 2025 to 2027 medium term budget plan, USAID Economic Development and Environment Office, Acting Office Director, Dr. Catherine Tembo further implored government to remove 60 percent excise tax and 16 percent Value Added Tax (VAT) from the denatured ethanol for cooking. Dr. Tembo also stressed the need for government to different denatured cooking ethanol from raw ethanol in the tax code. Read more: MoneyFM
In International News
The U.S. dollar remains the world’s primary reserve currency, and neither the euro nor the so-called BRICS countries have been able to reduce global reliance on the dollar, a new study by the Atlantic Council’s GeoEconomics Center shows. The group’s “Dollar Dominance Monitor”, opens new tab said the dollar continued to dominate foreign reserve holdings, trade invoicing, and currency transactions globally and its role as the primary global reserve currency was secure in the near and medium term. Dollar dominance — the outsized role of the U.S. dollar in the world economy — has been strengthened recently given the robust U.S. economy, tighter monetary policy and heightened geopolitical risks, even as economic fragmentation has strengthened a push by BRICS countries to shift into other international and reserve currencies. The Atlantic Council report said Western sanctions on Russia imposed by the Group of Seven advanced economies after Moscow’s invasion of Ukraine had accelerated efforts by the BRICS countries to develop a currency union, but the group had been unable to make progress on its de-dollarization efforts. Read more: Reuters
European stocks fell on Tuesday after a 7% drop in chipmaker Nvidia on Monday soured the mood, but U.S. equity futures pointed higher after falling the previous day. Stock market indices remained close to record highs as investors shifted into less flashy names. Government bond yields cooled and Japan’s yen stayed under pressure. Investors’ attention is being pulled in multiple directions, with snap elections in France starting at the weekend; the first U.S. Presidential debate on Thursday; and the release of the Federal Reserve’s preferred gauge of inflation on Friday. Read more: Reuters
China’s premier has called for countries to “oppose decoupling”, as economic tensions simmer between Beijing and the European Union ahead of the imposition of new tariffs on Chinese electric vehicles. Friction between the West and the world’s second-largest economy has intensified in recent years, as geopolitical hotspots crop up around the world and Beijing and Washington compete for supremacy in advanced technology. “We should broadly open our minds, work closely together, abandon camp formations, (and) oppose decoupling,” said Li Qiang, China’s second-ranking leader who has been tasked by President Xi Jinping with managing economic affairs. Li’s comments came during a speech at the opening of a World Economic Forum conference known as the “Summer Davos”, held this year in the northeastern Chinese city of Dalian. Read more: Al Jazeera
Canada is considering whether to impose import tariffs on Chinese-made electric vehicles and will seek the public’s opinion about the idea, Deputy Prime Minister Chrystia Freeland has said. On Monday, Freeland said the domestic car sector faced unfair competition from what she called China’s “state-directed policy of overcapacity,” and that Ottawa would open a 30-day public consultation period on July 2 as to how Canada can respond. “Chinese producers are quite intentionally generating a global oversupply that undermines EV producers around the world, including here in Canada,” Freeland told reporters in Vaughan, Ontario, echoing concerns raised by the United States and the European Union. Freeland said public consultations will help the government decide its policy response, which may include tariffs on imports, adding that the move would align Ottawa with allies in Washington and Brussels. Read more: Al Jazeera
Finally, Capital Markets News
In 87 trades recorded yesterday, 112,872 shares were transacted resulting in a turnover of K294,549.76. The following price changes were recorded yesterday:+K0.94 in CEC Zambia, +K0.03 in Zambeef and -K0.05 in ZANACO. Trading activity was also recorded in Airtel, Real Estate Investments Zambia, Standard Chartered Bank Limited, Zambia Breweries, Zambia Sugar, ZAFFICO and CEC Africa on the quoted tier. The LuSE All Share Index (LASI) closed at 13,843.63 points, 2.41% higher than its previous day close at 13,517.19 points. The market closed on a capitalization of K113,339,252,216.64 including Shoprite Holdings and K69,860,895,416.64 excluding Shoprite Holdings.
13 Govt Bonds trade with total face value of K15,819,000 and turnover K10,816,950 were processed yesterday.