Daily FiZ – Tuesday 14/03

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Good morning. Here’s what you need to know to start your day.

  • ZESCO set to cut electricity supply to Zimbabwe over the non-payment of US$ 10.7 million debt for February and March

  • Silicon Valley Bank: Global bank stocks slump despite Biden reassurances

  • CEC’s revenue increased by 9% in 2022, driven by local power sales

Story of the Day

So, I got to spend the whole Monday (6th March) morning in Johannesburg and Pretoria with one of South Africa’s dynamic sales, logistics and marketing company’s founder and executive head Trevor Mumba or as his over 70, 000 followers (on twitter) call him, the “Self Styled King” (@selfstyledking) and boy oh wasn’t it an enlightening experience. Trevor is a Zambian national who came to South Africa fifteen years ago and established what is now known as one of the ‘go to’ logistics companies that serves large corporates and individuals from Zambia to South Africa and beyond. During our candid four-hour, business founder to business founder conversation whilst driving and chatting “car-pool-karaoke” style, the unapologetic executive shared with me a number of insights into what it has taken for him to build a business from the ground up. Read more

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In Local Business News Sponsored by

Government has urged stakeholders in the transport sector to participate in the 2023 Land-Linked Zambia Conference and Exhibition, slated for 23rd to 24th March 2023 in Lusaka. Ministry of Transport and Logistics Permanent Secretary, Fredrick Mwalusaka, says the Land-Linked Conference and Exhibition will enable Zambia to have a valuable platform for stakeholders’ engagement in the region. Mr Mwalusaka adds that the conference will attract a number of participants in the transport sector from African countries such as the National Transport Agency from Angola and Walvis Bay Port authorities from Namibia among others. Read more: Lusaka Times

Savenda Group of Companies and its managing Director Clever Mpoha have engaged Eversheds Sutherlands, a global law firm, to represent them in cases involving breach of contract and allegations of corruption. Last week, Savenda announced that it will be sending 70 per cent of its workforce on forced leave, lamenting that it has been having difficulties accessing funds to pay salaries and other operational expenses following ACC’s move to restrict its main bank account, among other reasons. In October last year, the Anti-Corruption Commission said it had issued a restriction notice on one of the accounts for Savenda Systems Limited after company chief executive officer Clever Mpoha attempted to withdraw US$3,474,150. Read more: News Diggers

Nairobi will next month sign contracts with farmers in Zambia to grow maize exclusively for export to the Kenyan market as the government seeks to lower the cost of the staple, with the first consignment under the agreements expected in August. Agriculture Cabinet Secretary Mithika Linturi said they have finalised the deal that has seen Kenya allocated at least 50,000 acres of land for growing maize in the current planting season. The CS said the deal with the South African State has been informed by lower cost of production in Zambia and favourable weather. Read more: Business Daily 

Zambia’s power utility ZESCO Limited is set to cut electricity supply to Zimbabwe in the next 24 hours sending Harare deep into trouble. This is over the non-payment of US$ 10.7 million debt for the month of February and March. ZESCO has an arrangement with Zimbabwe through the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) to supply over 100MW per month on a prepayment basis. However, Zimbabwe has struggled to settle its obligations owing to serious foreign currency shortages. Read more: ZW News

In International Business News

Bank shares in Asia and Europe have slumped, despite reassurances from the US president that America’s financial system is safe following the collapse of two US lenders. The falls come after authorities moved to protect customer deposits when the US-based Silicon Valley Bank (SVB) and Signature Bank collapsed. Joe Biden promised to do “whatever is needed” to protect the banking system. But investors fear other lenders may still be hit by the fallout. On Tuesday, Japan’s Topix Banks share index fell by more than 7%, putting it on course for its worst day in more than three years. Read more: BBC News

HSBC has swooped to buy the UK arm of collapsed US Silicon Valley Bank (SVB), bringing relief to UK tech firms who warned they could go bust without help. Customers and businesses who had been unable to withdraw their money will now be able to access it as normal. The government and the Bank of England led the talks and worked through the night to scramble together the deal, which involves no taxpayer money. HSBC said it paid just £1 for the SVB’s UK arm. Read more: BBC News

United States President Joe Biden will call on Congress to impose a 25 percent minimum tax on billionaires as part of a series of proposed tax hikes on wealthy individuals and corporations, according to a US media report. Biden’s proposed spending plan would also nearly double the capital gains tax for investment from 20 percent to 39.6 percent, and lift income levies on corporations and wealthy Americans. Biden will unveil his budget plan on Thursday amid sharp divisions between Republicans and Democrats on taxes, spending and debt reduction, kicking off what are likely to be fraught negotiations between the White House and a divided Congress. The spending plan comes as Republicans and the White House are locked in a standoff over raising the debt ceiling, the total amount of money the federal government is allowed to borrow, amid a $31 trillion national debt. Read more: Reuters 

Meta Platforms Inc is exploring plans to launch a new social media app in its bid to displace Twitter as the world’s “digital town square”. “We’re exploring a standalone decentralized social network for sharing text updates. We believe there’s an opportunity for a separate space where creators and public figures can share timely updates about their interests,” a Meta spokesperson told Reuters in an emailed statement. Meta’s app will be based on a similar framework that powers Mastodon, a Twitter-like service that was launched in 2016. A Twitter-like app would allow Meta to take advantage of the current chaos at the Elon Musk-led company, where cost-cutting has been rampant. Read more: Reuters

Last week’s downgrade of Kenya’s debt repayment rating did little to protect the country from additional external debt. This comes after the World Bank Group approved an Sh32 billion increase in Kenya’s loan request, as Kenya is set to receive $1 billion (Sh129 billion) in budgetary support in June. According to the World Bank,“the program development objective is to enhance sustainable, inclusive and green growth by creating fiscal space in a sustainable manner, increasing competitiveness to boost exports in agriculture and improving governance to facilitate inclusive private sector-led development.” Read more: Business Insider 

Botswana will not back down from its demand for a larger share of the diamonds produced by its joint venture with De Beers, President of Botswana, Mokgweetsi Masisi said on Thursday, upping the stakes in negotiations to renew a sales agreement that ends in June. 70% of De Beers’ raw diamonds come from Botswana. Last month, Masisi threatened to withdraw from discussions to extend the sales agreement unless Botswana received a higher portion of the joint venture’s output. He made no mention of the magnitude of the stake requested. Read more: Business Insider

Finally, Capital Markets News

Copperbelt Energy Corporation’s Group revenue increased by 9% toUSD374.4 million (2021: USD342.7 million)driven mainly by higher local power sales, wheeling sales and regional power sales of9%, 45% and 12% respectively. Profitability remained fat at USD50.8 million (2021: USD50.9million) on the back of higher impairment loss of USD24.1 million (2021: USD12.6 million), driven by the recalibration of the I R S 9impairment model. Cash costs increased to USD41.9 million (2021: USD35.6 million) owing to the Kwacha appreciating yb 15% on average. The exchange rate averaged ZMW16.93:USD1 in 2022 (2021: ZMW19.96). The general improvement in collections positively impacted the liquidity position, resulting in cash flow from operations of USD94.5 million (2021: USD79.3 million) and a cash balance of USD83.4 million (2021: USD92.7 million). The Group, having addressed some of the key uncertainties it had faced and backed by both the dividend policy and the strength of the financial performance, declared and paid an interim dividend of USD50.4 million, which represents a 35% increase over the 2021 dividend distribution of USD37.4 million. The entity results are included in the 2022 Annual Report. Read more

In 30 trades recorded on Friday, 8,848 shares were transacted resulting in a turnover of K23,351.99. Trading activity was recorded in AECI, BATA, British American Tobacco Zambia, CEC Zambia, PUMA, Zambia Breweries, Zanaco, Zambia Sugar and CEC Africa on the quoted tier . The LuSE All Share Index (LASI) maintained its close at 7,227.17 points. The market closed on a capitalization of K72,390,239,909.89 including Shoprite Holdings and K37,607,554,469.89 excluding Shoprite Holdings.

Picture of the Day

President Hakainde Hichilema and Zanaco CEO, Mukwandi Chibesakunda at the Youth Indaba held at Mulungushi International Conference Centre, where they discussed the great potential of the Zambian youth.
For any feedback on the stories captured on the Daily FiZ, email Natasha on dailyfiz@fizambia.com

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