Good afternoon. Here’s what you need to know
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Zambia to emerge from debt default as bondholders back $3 bln restructuring
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Bank of Zambia implements policy to drive transparency, effectiveness in foreign exchange market
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China defies global copper squeeze with near-record production
In Local Business and Finance News
Zambia’s ministry of finance said on Tuesday more than 90% of holders of its $3 billion in outstanding international bonds had accepted its restructuring proposal, paving the way for it to emerge from a lengthy default. The country defaulted more than three years ago and is reworking its debt under the G20 Common Framework – a platform to bring together creditors like China and developed creditor nations, known as the Paris Club, to ensure swift and smooth debt overhauls for low-income countries. Zambia was widely seen as a test case for the G20 plan but the process had been beset by delays, curbing investment and economic growth and weighing on local financial markets. A devastating drought worsened the situation. “Finalising this agreement with bondholders will create the fiscal breathing space necessary for Zambia to remain on a trajectory of sustainable economic growth,” Finance Minister Situmbeko Musokotwane said in an online statement. Read more: Reuters
Ministry of Technology and Science has emphasized the need to enhance digital financial literacy in the country to ensure that the underserved and unserved communities are financially included. Speaking during the signing of a Memorandum of Understanding between Financial Sector Deepening (FSD) Zambia and Alliance for Science, Ministry’s Director for Planning and Information, Victor Kachabe noted that digitalization is a very critical component in financial inclusion as it leads to economic growth. Mr. Kachabe said government has created an enabling environment to ensure that such partnerships can thrive by creating jobs and expand the economy so as to sustain the wellbeing of communities. He further noted that the Memorandum of Understanding signed between the two organizations stands at a strategic point where citizens can be advised on how to invest for growth and not consumption. Read more: Money FM
The Bank of Zambia (BoZ) has issued a gazette notice aimed at enhancing transparency, efficiency and effectiveness of the domestic foreign exchange market in the country. The Gazette Notice No. 525 of 2024 came into effective on Saturday. This meant that a person buying or selling foreign currency for Kwacha in quantities up to the prescribed negotiable amount would transact at rates displayed on the Authorised Dealers’ Board rates. The guidelines for the notice however stated that any amounts above the displayed threshold may be negotiated. “For example, if the prescribed negotiable amount is US$1, 000, 000, this means that the person or corporate entity trading below US$1, 000, 000 cannot engage in any negotiation for a price but will only use the board rates as displayed by the financial institution that one is dealing with. “However, if the amount is equal to or exceeds the prescribed negotiable amount (in this example, US$1, 000 ,000), the person or corporate entity can negotiate for a price,” according to the guidelines. Read more: Zambia Monitor
Innovative products aimed at improving voluntary tax have been launched by the Zambia Revenue Authority (ZRA). The products launched on Monday in Lusaka included the revised service charter, Customer Relationship Management System (CRMS), online taxpayer education and a toll-free line. These are in line with the authority’s strategic plan pillar number two which puts emphasis on customer focus and collaboration, according to the ZRA Commissioner-General, Dingani Banda, during the launch. “For customer focus and collaboration, our focus in this space is to have a satisfied and knowledgeable taxpayer population and this is the reason that we are all here today to fulfil the strategic pillar number two,” he said. Read more: Zambia Monitor
In International News
The global copper market is gripped by fears of a shortage, which has propelled prices to record levels and sparked a $49 billion takeover battle. But in China, the world’s biggest producer and consumer of the refined metal, there’s more than enough to go around. At the center of that conundrum are the nation’s ever-expanding copper smelters. The industry is maintaining production at near-record levels — defying a scarcity of raw materials — as higher prices unlock more scrap metal for processing. Smelters had pledged to reduce capacity after their fees collapsed because of a supply squeeze on the imports of ore they use as feedstock. The prospect of insufficient copper in China is just one of the pillars supporting a barnstorming rally that took the metal above $11,000 a ton for the first time at the start of last week. But the cuts haven’t happened and China’s faltering economy isn’t able to absorb the excess. Read more: Mining
Global oil prices steadied on Tuesday as the prospect of OPEC+ maintaining oil supply curbs at its June 2 meeting and hopes of strong U.S. summer fuel demand balanced concern about higher-for-longer U.S. interest rates. On Monday, oil prices rose more than 1% in muted trade owing to public holidays in Britain and the United States, with hopes of a demand boost from the start of the U.S. summer driving and vacation season providing support. The July contract for Brent crude, the global benchmark, rose 38 cents, or 0.5%, to $83.48 a barrel by 1327 GMT. U.S. West Texas Intermediate (WTI) crude was at $79.15, up $1.43, or 1.8%, from Friday’s close, having traded through a U.S. holiday to mark Memorial Day without a settlement. Read more: Reuters
Saudi Arabia is planning a multi-billion-dollar share sale in energy giant Aramco as soon as June in what would be one of the region’s biggest stock deals, two people familiar with the matter said. The offering could raise around $10 billion, one of the people said. The preparations are ongoing and the details could still change, the sources said, who were speaking on condition of anonymity because the matter is private. The shares will be listed in Riyadh and it will be a fully marketed offering rather than an accelerated sale over a few days, they added. “Decisions about share sales are matters for our shareholders and are not something we are able to comment on,” Aramco said. The government’s communication office did not immediately respond to a request for comment. Banks including Citigroup, Goldman Sachs and HSBC had previously been lined up to manage the sale, Reuters has reported. Saudi Arabia has embarked on an economic transition known as Vision 2030, which puts an expanded private sector and non-oil growth at the center of its future development. The Saudi government remains overwhelmingly Aramco’s biggest shareholder, with a 90% stake, and heavily relies on its payouts. Read more: Reuters
Investor demand surged at South Africa’s weekly government bond sale on Tuesday, a day ahead of a general election that could be pivotal for markets. Primary dealers placed orders for 16.2 billion rand ($881 million) of debt, more than four times the 3.75 billion rand of securities on sale. This compares with a bid-to-cover ratio of 3.6 at the previous auction, according to central bank data compiled by Bloomberg. Over the medium term, government bonds could be the biggest beneficiaries of a favorable election outcome. As central banks globally move into an easing phase, the search for yield becomes more urgent, making South Africa’s double-digit returns particularly attractive. Only five emerging markets offer higher yields, including Lebanon, Russia, and Nigeria. Read more: Yahoo Finance
Finally, Capital Markets News
In 126 trades recorded yesterday 65,591 shares were transacted resulting in a turnover of K402,296.68. The following share price changes were recorded yesterday: +K0.90 in Bata, -K0.01 in Zambeef, +K0.01 in ZANACO and +K0.01 in CEC Africa on the quoted tier. Trading activity was recorded in Airtel, CEC Zambia, Chilanga Cement, Real Estate Investment Zambia, Standard Chartered Bank Limited, Zambia Breweries and Zambia Sugar. The LuSE All Share Index (LASI) closed at 13,092.03 points, 0.14% higher than it’s previous day close at 13,074.22 points. The market closed on a capitalization of K101,272,048,392.37 including Shoprite Holdings and K66,489,362,952.37 excluding Shoprite Holdings.
19 Govt Bond trades with a total face value of 34,621,000 and turnover 23,467,180 were processed yesterday.
