Daily FiZ – Wednesday 06/08

Story of the Day

Despite being in default on its external debt portfolio, Zambia’s macroeconomic environment has improved notably in recent months. Among key macroeconomic fundamentals that have evolved favorably is the country’s consumer price inflation which, although being above target of 6-8% for more than 3 year, has decelerated significantly. This positive development has come despite the partial removal of fuel subsidies that has seen pump prices scale up by an average of over 35% since last December 2021 at the time that the Russo-Ukrainian war occasioned an escalation in international crude oil prices. Read more

Local Business and Finance Sponsored By Liquid Intelligent Technologies

Zambia’s Konkola Copper Mines (KCM) will appoint an adviser to help it find an equity investor willing to fund the mine’s expansion, its provisional liquidator said on Tuesday. Zambia’s previous government put KCM into the hands of a liquidator in May 2019, triggering an ongoing legal dispute with Vedanta Resources, KCM’s parent company. The government at that time accused Vedanta of failing to honor license conditions, including promised investment, charges which Vedanta has denied. Read more: Mining

The recently released 8th National Development Plan has correctly identified the low diversification of the economy and the high youth unemployment among the four persistent development issues that Zambia faces; and consequently, the priority areas. In order for the country to diversify its economy, its products and services ought to have access to external markets.  Read more: Lusaka Times

The Zambian government on Monday expressed optimism about ensuring universal coverage of electricity to all parts of the country by 2030. Peter Kapala, the Minister of Energy, said the country’s power utility, Zesco Limited, has since embarked on a program to connect more people to the national grid through increased connections. He said that there were about 67,000 pending connections as at the end of December last year which the power utility had been dismantling in order to have more people access electricity. Read more: China View

The Zambian government on Tuesday appealed to cooperating partners to help finance the successful holding of the country’s first-ever electronic population census which has faced a financial deficit. Situmbeko Musokotwane, the Minister of Finance and National Planning said the government has faced challenges in financing the exercise scheduled to start next month. In his virtual address to cooperating partners during a roundtable meeting, the minister said various challenges have emerged in the past few years due to a rise in commodity prices. Read more: China Org

International Business and Finance Sponsored By Agricultural and Commercial Society of Zambia

In the latest edition of its Sub-Saharan Africa Regional Economic Outlook which was released earlier this week, the International Monetary Fund (IMF) disclosed that the ongoing war in Ukraine has exacerbated Africa’s debt crisis, pushing the public debt ratios across the continent to a 20-year high. The report, a copy of which was obtained by Business Insider Africa, also noted that other factors such as the economic fallouts of the pandemic have contributed to the debt crisis. Read more: Business Insider

High oil and gasoline prices will need to rise even higher this summer to incentivize new production and discourage consumption, according to Goldman Sachs. The Wall Street bank is now forecasting Brent crude oil prices will average $140 a barrel between July and September, up from its prior call of $125 a barrel. Brent is currently trading at about $120 a barrel. Worse, Goldman Sachs said summer retail gas prices are going to need to spike to levels normally associated with $160 oil in order to curtail demand. Read more: CNN

Apple is planning a buy now pay later (BNPL) service as part of its new operating system, iOS 16. Apple Pay Later will allow users in the US to spread the cost of a purchase into four payments over six weeks, without paying interest or fees. BNPL services – which are currently unregulated in the UK – have been criticised for the way they are used by low-income groups. Read more: BBC News

The World Bank has sharply downgraded its outlook for the global economy, pointing to Russia’s action against Ukraine, the prospect of widespread food shortages and concerns about the potential return of “stagflation” — a toxic mix of high inflation and sluggish growth unseen for more than four decades. The 189-country anti-poverty agency predicted Tuesday that the world economy will expand 2.9 percent this year. That would be down from 5.7 percent global growth in 2021 and the 4.1 percent it had forecast for 2022 back in January. Read more: CGTN

Sri Lanka’s prime minister says the country needs at least $5 billion over the next six months to pay for essential goods as it faces its worst economic crisis in more than 70 years. Ranil Wickremesinghe told parliament the money is needed for basic items such as food, fuel and fertiliser. In May, Sri Lanka defaulted on its debts with international lenders for the first time in its history. The country has held bailout talks with the International Monetary Fund. Read more: BBC News

Capital Markets Report Sponsored By WWF Zambia

In 135 trades recorded yesterday, 35,497 shares were transacted resulting in a turnover of K107,153. A share price gain was recorded in AECI of K2.60 and in Puma of K0.01. Trading activity was also recorded in AECI, Copperbelt Energy Corporation, Chilanga Cement, Pamodzi, Standard Chartered Zambia, Zambeef, Zanaco, Zambia Sugar and ZAFFICO. The LuSE All Share Index (LASI) closed at 6,814.34 points, 0.19% up from its previous close of 6,801.00 points. The market closed on a capitalization of K70,593,294,559 including Shoprite Holdings and K35,810,609,119 excluding Shoprite Holdings.

For any feedback on the stories captured on the Daily FiZ, email Natasha on dailyfiz@fizambia.com
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