Good morning. Here’s what you need to know
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Zambia Sees $388 Million IMF Boost as Bondholders Ratify Revamp
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AfDB says Zambia needs $3.5 billion annually for its structural transformation
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Global public debt hit a record $97 trillion in 2023
In Local Business and Finance News
The IMF reached a staff-level deal with the government on the third review of an existing $1.3 billion economic program, according to an emailed statement. That included approving a request to augment it to about $1.7 billion to assist with its worst drought in at least four decades, a spokesman for the fund said. Zambia will have immediate access to about $573 million as soon as the emergency lender’s management and board approve the agreement, with a meeting due by the end of June. The copper-rich nation faced delays in completing the review as it worked out how to fill a funding gap caused by the drought, which has hammered its harvest and vital hydroelectric production. Read more: MSN
The Common Market for Eastern and Southern Africa (COMESA) and the World Bank have launched the implementation of a USD$15 billion Accelerating Sustainable and Clean Energy Access Transformation (ASCENT) project. The project is part of a new programme by the World Bank designed to accelerate sustainable and clean energy access and provide life transforming opportunities by connecting 100 million people to the grid and off grid energy across 20 countries in Eastern and Southern Africa over a period of seven years. Read more: Lusaka Times
The Korean government has reportedly expanded its Official Development Assistance to US$10 billion, aimed at catalysing projects for cooperation with Africa, authorities say. Acting Minister of Foriegn Affairs and International Cooperation, Mulambo Haimbe, highlighted that Korea had also expanded its allocation to export financing of approximately US$14 billion. Haimbe said this when he represented President Hakainde Hichilema at the 2024 Korea-Africa Summit in Seoul, Republic of Korea. The Korea-Africa Summit is taking place from June, 4 to June 5, 2024 under the theme: “The Future We Make Together: Shared Growth, Sustainability and Solidarity.” “Zambia and Africa at large looked forward to mutually beneficial partnerships, encompassing a significant proportion of value addition to raw materials like critical minerals in the host countries,” Haimbe said. Read more: Zambia Monitor
About US$3.5 billion is needed annually for Zambia to finance its acceleration of the much-needed structural transformation and sustained policy reforms. The African Development Bank (AfDB) had pointed out the need for Zambia to accelerate its structural transformation and diversification. In its African Economic Outlook 2024, the Bank indicated that Zambia would require US$3.5 billion in annual financing to achieve this goal. “Zambia needs to accelerate its structural transformation and diversification. Structural transformation will require US$3.5 billion in annual financing, along with improvements in institutional quality and sustained policy reforms,” the Bank stated. Read more: Zambia Monitor
The Zambia Statistics Agency (ZamStats) has disclosed that Switzerland was Zambia’s largest export market in April 2024, accounting for 44.9 percent of export earnings. ZamStats Statistician General Goodson Sinyenga also revealed that South Africa was the country’s major source of imports, accounting for 29.5 percent of the import bill. In a monthly bulletin, Sinyenga revealed that China accounted for 77.9 percent of Zambia’s exports to Asia. “Switzerland was the largest market for Zambia’s exports in April 2024 accounting for 44.9 percent of export earnings. Asia was the second largest market for Zambia’s exports accounting for 28.9 percent of export earnings. Within this grouping, China was the dominant market with 77.9 percent followed by India 10.7 percent.” Read more: News Diggers
In International News
Global public debt rose to a record $97 trillion last year, the United Nations reported Tuesday June 4, with developing countries owing roughly one-third of that crimping their ability to pay for basic government services like health care, education and climate action. U.N. Trade and Development, formerly known as UNCTAD, said the value of money owed by governments rose by $5.6 trillion from 2022. In its report entitled “A World of Debt,” the agency said high interest payments are outstripping growth in essential public spending. “Developing countries must not be forced to choose between servicing their debt or serving their people,” the report said. “The international financial architecture must change to ensure a prosperous future for both people and the planet.” Read more: Africa News
Indian stocks have fallen sharply after vote counting in the country’s general election indicated Prime Minister Narendra Modi’s party might not be able to form a majority government. The benchmark NSE Nifty 50 share index closed down nearly 6%, its steepest fall since India’s first Covid lockdowns in March 2020. Early results suggest Mr Modi’s political party may need to rely on allies and form a coalition government. That could lead to uncertainty over economic policies, some analysts said. The NSE Nifty 50, which comprises stocks in various big companies, had plunged 8.5%. The rupee slid 0.5% against the US dollar, its biggest fall in 16 months. Read more: BBC News
Canal+ is set to begin the process of acquiring South African media company Multichoice after months of speculation. Canal+ first began buying shares in MultiChoice in 2020 in a bid to grow its business in Africa. Today, the French company owns about 45.2% of Multichoice after investing €1.2 billion ($1.3 billion) into the company. It aims to acquire the remaining shares to complete the acquisition. Reports about Canal+’s interest in acquiring Multichoice surfaced in February, leading to official talks between the two companies in April. When the French company’s shareholding value surpassed 35%, it was required by South Africa’s Takeover Regulation Panel to make a mandatory offer. According to Bloomberg, the joint announcement values Multichoice at around $3 billion. Read more: Business Insider
Copper fell below $10,000 a metric ton as traders weighed a sharp rise in global inventories and soft US job openings data that reinforced bets that the Federal Reserve will be able to cut interest rates this year. Stockpiles on the Shanghai Futures Exchange have climbed to the highest since 2020, and there has also been a steady stream of smaller inflows into Asian depots tracked by the London Metal Exchange over the past few weeks. Inventories typically decline at this time of year, and the jump has put pressure on prices after copper spiked to a record high above $11,100 last month. Read more: Mining
Finally, Capital Markets News
In 151 trades recorded yesterday 83,543 shares were transacted resulting in a turnover of K1,271,091.61. The following price changes were recorded yesterday: K0.02 gain in CEC Zambia and K0.01 loss in ZANACO. Trading activity was also recorded in Airtel, Chilanga Cement, PUMA, Real Estate Investments Zambia, Standard Chartered Bank Limited, Zambia Breweries, Zambeef, ZAMEFA, Zambia Sugar and CEC Africa on the quoted tier. The LuSE All Share Index (LASI) closed at 13,110.11 points, 0.06% higher than its previous close of 13,106.08 points. The market closed on a capitalization of K101,353,135,724.48 including Shoprite Holdings and K66,570,450,284.48 excluding Shoprite Holdings.
8 Govt Bond trades with a total face value of K126,167,040 and turnover K84,886,870 were processed yesterday.