Good morning. Here’s what you need to know
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Fitch Upgrades Zambia’s FCY Short Term Rating to ‘C’ from ‘RD’ on Dollar Bond Restructure Strides, Long Term Rating kept at ‘RD’
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Zambia’s Gold reserves reach $168 million
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Stronger United States dollar drives copper prices to their lowest in five weeks
In Local Business and Finance News
Fitch international rating agency has upgraded Zambia’s short term issuer rating to ‘C’ from ‘RD’ while maintaining its long term issuer rating at ‘RD’. The improved assessment is supported by dollar bond restructure strides. Zambia on June 04 earned a positive nod on its dollar bonds when its Eurobond holders voted in favor of the proposal to reissue fresh bonds maturing 2033 and 2053 respectively. The Southern Africa nation will see its defaulted stock of $3 billion worth of 2022 ($750 million), 2024 ($1.25 billion) and 2027 ($1 billion) morph into 2033 ($1.7 billion) and 2053 ($1.35 billion) under two base and upside case scenarios. Bond holders as earlier as a week after consent solicitation on the London Stock Exchange showed strong willingness to back the debt reorganization proposal. Read more: The Business Telegraph
The Central Bank, the Bank of Zambia – BoZ, which holds Zambia’s reserves, disclosed that it purchased gold amounting to US$10.6 million in the first quarter of 2024. Bank of Zambia Governor Dr. Denny Kalyalya said the Central Bank had purchased gold amounting to US$10.6 million in the first quarter of 2024 bringing the total value of gold acquired locally by the Bank of Zambia to US$168.1 million since the initiative began. Speaking during the presentation of the monetary policy statement for quarter 1 2024, the Bank of Zambia Governor Dr Denny Kalyalya said the US$10.6 million worth of Gold purchased in Q1, brings the total value to US$168.1 million since the Bank started purchasing gold locally. Furthermore, Dr. Kalyalya highlighted the growth in Gross International Reserves, which increased to US$3.6 billion at the end of March 2024, equivalent to 3.9 months of import cover. Read more: Zambian Business Times
The Zambia Association of Manufacturers (ZAM) has put forward several proposals for the 2025 budget, including a delay in implementing smart invoicing at the Kasumbalesa Border post by six to twelve months. ZAM president, Ashu Sagar, highlighted that increased costs were threatening the competitiveness of Zambian products, risking declines in local production and trade volumes. To address this, Sagar called for the establishment of export trading zones by classifying Kasumbalesa Border post to facilitate seamless trade, which would help keep Zambian products competitive. He emphasized that the Kasumbalesa Border post was a key hub between Zambia and the Democratic Republic of Congo, facilitating about 650 trucks per day and supporting 22 million people. Read more: Zambia Monitor
DMMU National Coordinator Gabriel Pollen says the country has received about $395 million from cooperating partners as part of the drought response support. And Dr Pollen has disclosed that Zambia will next week receive a pay out of about $13 million from the African Risk Capacity under a drought insurance cover. In an interview, Friday, Dr Pollen described the support from cooperating partners as great. “It’s been great. We have an indicative figure in terms of how much money has come but overall, we have about $395 million from cooperating that’s direct budget support or in the context of the current drought,” he said. Read more: News Diggers
In International News
Copper prices in London hit the lowest in five weeks on Friday, under pressure from a stronger United States (US) dollar. This was also as a result of stronger-than-expected US employment data and mixed trade numbers from top metals consumer China, according to a daily market report published by Access Bank Zambia. “Three-month copper on the London Metal Exchange was 3.7 percent lower at US$9,773.50 per metric tonne, after breaking below the 50-day moving average at US$9,860 to touch its lowest since May 2 at US$9,755,” the report indicated. Read more: Zambia Monitor
French markets and the euro were roiled Monday by President Emmanuel Macron’s surprise decision to call a snap election after his party lost to the far right in a vote for European lawmakers. Big gains for the far right in the French election could force Macron to govern with a hostile parliament, making it harder for his centrist administration to pursue its policy agenda and raising doubts about its ability to put government finances on a more sustainable footing. France’s CAC 40 index, which represents 40 of the biggest companies listed in Paris, fell 1.8% by 11.02 a.m. ET, with banks among the biggest losers. Europe’s benchmark Stoxx 600 index was trading 0.5% down on the day by the same time. The euro fell 0.6% against the US dollar in late-afternoon trade, sinking to its lowest level in a month. Against the British pound, the currency, shared by 20 countries in Europe, also dropped 0.6% to stand at its weakest level in nearly two years. Read more: CNN
Apple is to boost its Siri voice assistant and operating systems with OpenAI’s ChatGPT as it seeks to catch up in the AI race. The iPhone maker announced the Siri makeover along with a number of other new features at its annual developers show on Monday. It is part of a new personalised AI system – called “Apple Intelligence” – that aims to offer users a way to navigate Apple devices more easily. Updates to its iPhone and Mac operating systems will allow access to ChatGPT through a partnership with developer OpenAI. ChatGPT can also be used to boost other tools, including text and content generation. The test version will become available in the autumn. Tim Cook, Apple chief executive, said the move would bring his company’s products “to new heights” as he opened the Worldwide Developers Conference at the tech giant’s headquarters in Cupertino, California. Read more: BBC News
The S&P 500 and Nasdaq Composite closed at fresh records as Nvidia lifted tech stocks and investors looked ahead to the Federal Reserve’s interest rate decision. The broader market index advanced by 0.26%, closing at 5,360.79, while the Nasdaq Composite gained 0.35% to end at 17,192.53. The Dow Jones Industrial Average added 69.05 points, or 0.18%, ending at 38,868.04. Nvidia shares added roughly 0.8% as the stock’s 10-for-1 spilt took effect. Meta Platforms jumped nearly 2%, pushing the S&P 500 tech sector about 0.3% higher. The Fed’s latest rate decision and May’s consumer price index slated for Wednesday could be key tests for markets, especially after Friday’s strong jobs report continued to suggest the central bank could hold off on lowering rates. Investors will parse through the Fed’s updated projections on the timing and frequency of rate cuts. Markets are now pricing in just one rate cut this year, coming in November, according to the CME FedWatch Tool. Read more: CNBC
Finally, Capital Markets News
In 99 trades recorded yesterday 25,406 shares were transacted resulting in a turnover of K68,889.75. The following price changes were recorded yesterday: K0.14 in CEC Zambia and K0.01 in ZANACO. Trading activity was also recorded in Airtel, Chilanga Cement, Real Estate Investments Zambia, Standard Chartered Bank Limited, Zambia Breweries, Zambeef, Zambia Sugar and CEC Africa on the quoted tier. The LuSE All Share Index (LASI) closed at 13,155.41 points, 0.41% higher than its previous close of 13,101.48 points. The market closed on a capitalization of K101,556,362,657.83 including Shoprite Holdings and K66,773,677,217.83 excluding Shoprite Holdings.
20 Govt Bond trades with a total face value of K32,885,000 and turnover K22,533,890 were processed yesterday.
