Good afternoon. Here’s what you need to know
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US government announces $10 million concessional loan to 260 Zambian enterprises
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Zambia Bondholders To Forego $840M
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Zambia Remains With $1.9 Billion in Commercial Debt Owed to Chinese Lenders
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Visa, Mastercard reach $30bn settlement over credit card fees
In Local Business and Finance News Sponsored By
Zambia’s three-plus-year slog to escape default is shifting to $3.5 billion in commercial debt mainly owed to Chinese lenders, after it finally struck a deal with holders of its eurobonds. Among the loans Zambia still needs to revamp are $1.9 billion borrowed from state-owned creditors in China including Industrial & Commercial Bank of China Ltd. and China Development Bank, according to a person familiar with the situation. Engagement with some of the Chinese creditors has progressed well, the person said. Read more: Bloomberg
Zambia’s Euro Bondholders will forego approximately 840 million dollars of their claims under the debt restructuring agreement. The London Stock Exchange says the bondholders will also provide cash flow relief of approximately 2.5 billion dollars during the IMF programme period. The respective weighted average maturity will be 15 years and 8-years under the Base Case Treatment and the Upside Case Treatment. According to a statement, the present value concessions from the Bondholders at current market rates will be significant. However, the exchange says concessions are necessary given the constraints faced by Zambia, and are essential to achieve the relief required under the Debt Sustainability Analysis to restore financial stability to the country. Read more: ZNBC
The National Pensions Scheme Authority- NAPSA has signed a common terms and financing agreement with Macro Oceans Investment Consortium -MOIC- for the 650 million United States dollar upgrade of the Lusaka-Ndola road into a dual carriageway. Speaking during the signing ceremony, NAPSA Director General Muyangwa Muyangwa said the upgrading of the 327 Kilometers road will also include rehabilitation of the 45 kilometers Luanshya-Fisenge-Masangano road. Mr. Muyangwa explained that under the agreement Macro Oceans Investment Consortium will have a 25-year concession period to finance, design, construct, and maintain the two roads. NAPSA Vice Board Chairperson Myra Ngoma said the construction of the 327 kilometers road is expected to come with far-reaching benefits for both urban and rural communities along the corridor. Ms. Ngoma added that the road will also improve transportation of goods and stimulate economic activities. Read more: ZNBC
Airtel Networks Zambia Plc has released its full-year results for the year ended 31 December 2023 and disclosed income growth by 28.4% from ZMW 4,451 million (as at 31 December 2022) to ZMW 5,716 million as of 31 December 2023. The above performance is largely attributed to the increase in the customer base by 11.2% from 9.195 million on 31 December 2022 to 10.227 million on 31 December 2023. Airtel Board Chairperson Katebe Monica Musonda announced the results in Lusaka at the Company’s Annual General meeting and told the shareholders that there had been an increase in the operating profit at ZMW 2.2 billion for the period under review, which was an increase of 26.9% compared to the same period last year. She said this was mainly as a result of the strong performance on revenue, and management’s consistent optimization of operating expenses in view of the harsh economic environment. Read more: Zambian Business Times
China will continue cooperating with all sides to advance Zambia’s debt restructuring, a foreign ministry spokesperson said on Tuesday, without saying if it supported a proposed deal the southern African country reached with overseas bondholders. Zambia and the bondholder group said on Monday that they reached a new agreement to restructure $3 billion of international bonds and that the proposal had been approved by Zambia’s official creditors, of which China is the biggest. “China, as co-chair of the Zambian Debt Committee, has made concerted efforts with all parties concerned to promote significant progress in the disposal of Zambia’s debt,” Lin Jian, a spokesperson for China’s Ministry of Foreign Affairs, said in a regular press conference. Read more: Reuters
Some U.S. Senators met with President Hakainde Hichilema in Lusaka on Tuesday to learn more about the impact of US-government investments and programmes. During the meeting, the US congressional delegation led by Senator Patty Murray, announced that International Development Finance Corporation (IDFC) would provide a US$10 million concessional loan to 260 brands. The US$10 million concessional loan is meant to expand their storage and production capacity for maize-based, soya-based, Hichilema learnt. The delegation through Murray added that the loan would also improve production of other nutritious and affordable consumer food products, strengthening food security. “The loan facility was a follow up to the earlier support from the U.S. Agency for International Development, last month at the Partnership for Global Infrastructure and Investment Lobito Corridor Private Sector Investment Forum in Zambia,” Murray said. Read more: Zambia Monitor
Botswana President, Dr Mokgweetsi Masisi, has arrived in Zambia to discuss ways to deepen bilateral relations between the two countries. Zambia and Botswana would also discuss ways on how to enhance people-to-people connections, according to President Hakainde Hichilema as seen on his official Facebook handle. The Head of State said this would strengthen the multilateral relations at a Southern African Development Community (SADC) level. Read more: Zambia Monitor
In International News
Visa and Mastercard have reached an estimated $30bn antitrust settlement to limit credit and debit card fees for merchants in the United States, with some savings likely to be passed on to consumers through lower prices. If it receives court approval, it would resolve most claims in nationwide litigation that began in 2005. However, some opponents believe it may not go far enough. Merchants have long accused Visa and Mastercard of charging inflated swipe fees or interchange fees when shoppers use credit or debit cards and barring them, through “anti-steering” rules, from directing customers toward cheaper means of payment. According to Bankrate.com, swipe fees typically include small fixed fees plus a percentage of total sale amounts and average about 1.5 percent to 3.5 percent per transaction. Under the settlement, Visa and Mastercard would reduce swipe rates by at least four basis points (0.04 percentage points) for three years and ensure an average rate that is seven basis points below the current average for five years. Read more: Al Jazeera
Africa’s telecommunications giant, MTN, has struck a share purchase deal with Telecel, an Africa-focused telecommunications service provider, to acquire MTN’s equity stakes in MTN Guinea-Bissau and MTN Guinea-Conakry. The agreement was reached in December 2023 and is subject to several conditions precedent, according to the statement in MTN’s financial report for the year 2023. MTN says Telecel, an established telecoms operator with a significant presence in Africa, is well-positioned to drive the growth and further development of these operations and contribute to technological and economic progress in these markets. “As we advance through this transition, MTN is focused on ensuring a smooth and seamless transition for our customers, employees and all other stakeholders,” the financials read in part. Read more: Business Insider
The Group of Seven (G7) initiative to create a single-node location in Antwerp, Belgium, through which all diamonds should pass to verify G7 compliance, sparks huge backlash across diamond producers in Africa. In December, the Group of Seven (G7) nations—comprising Canada, France, Germany, Italy, Japan, the UK, and the US, in addition to the European Union—unveiled fresh restrictions aimed at stemming the influx of Russian diamonds into their respective markets. These measures entail a prohibition on direct imports of diamonds from Russia, effective as of the onset of the new year. As of March 1, the sanctions were expanded to encompass Russian-origin diamonds that have been polished in a third-party nation. A blockchain-enabled traceability system is slated for implementation in the final phase, commencing on September 1, with the European Commission specifying that diamond verification is to be conducted in Antwerp. Currently diamond certification occurs within Africa, resulting in cost-effective processes for African diamond producers. Under the G7’s proposal, African countries, presently responsible for over 60% of global rough diamond production, won’t be allowed to certify their own mined diamonds anymore. Read more: Business Insider
The Yen hit a 34-year-low on Wednesday, weakening as much as 151.97 against the U.S. dollar and fueling market questions over potential government intervention to prop the Japanese currency. The Yen was last at 151.22 against the dollar at 10:19 a.m. London time after paring back some losses. The Japanese currency struck its previous record low at the tail end of last year, when it declined to 151.95 against the dollar in October 2023. The currency’s weakness has indicated to many investors that Japanese policymakers could step in to strengthen the besieged currency. Japan’s finance minister Shunichi Suzuki has indicated that measures to “respond to disorderly FX moves” were not off the table. Following a meeting of the Bank of Japan with the finance ministry and the Financial Services Agency, Masato Kanda , the vice finance minister for international affairs, said that the Yen’s moves were being watched closely and urgently, Reuters reported. Read more: CNBC
China has initiated dispute settlement proceedings against the United States at the World Trade Organization to safeguard its interests in the electric vehicle industry, the Chinese mission said on Tuesday and the WTO confirmed. China said it was contesting “discriminatory subsidies” under the U.S. Inflation Reduction Act (IRA) that it said resulted in the exclusion of goods from China and other WTO countries. The wide-ranging law provides billions of dollars in tax credits to help consumers buy electric vehicles and companies produce renewable energy, as President Joe Biden aims to decarbonise the mighty U.S. power sector. “Under the disguise of responding to climate change, reducing carbon emission and protecting environment, (these subsidies) are in fact contingent upon the purchase and use of goods from the United States, or imported from certain particular regions,” the Chinese mission said. It said it was launching the proceedings “to safeguard the legitimate interests of Chinese electric vehicle industry and to maintain a fair level playing field of competition for the global market”. Read more: CNBC
Ethiopia’s biggest bank says it has recouped nearly 80% of the cash it lost during what it says was a glitch in its system that allowed customers to take out more money than they had in their accounts. Abe Sano, president of the Commercial Bank of Ethiopia, told reporters Tuesday that around $14 million was withdrawn or digitally transferred during the error. The value of the transactions ranged from 9 cents to $5,350, he said. The amount lost initially was reported as $40 million. Nearly 15,000 people have voluntarily returned funds that were “taken illegally,” the bank said in a statement. But 567 individuals haven’t yet returned money that is not theirs. On Tuesday, the bank posted their names and account details online, in an apparent attempt to shame them into giving it back. “The total amount remaining is not significant for the bank, but if this money is not fully recouped, it sends the wrong message,” Abe said. Read more: Africa News
US-based corporations are making more money than ever before, and they’re putting that money right back into shareholders’ pockets. One of the reasons the S&P 500 is up more than 10% so far this year is because investors expect dividends — a redistribution of profits from a company to its shareholders — to get bigger. Dividend payouts to shareholders by companies in the S&P 500 reached a new record in 2023, and that number is projected to grow in 2024, according to data from the CME Group. The 200 largest publicly traded companies in the United States saw their combined net profits soar to $1.25 trillion in 2022, a gain of 63% from 2018. About 90%, or $1.1 trillion, of that profit went to shareholders through stock buybacks and dividend payments, according to new research from anti-poverty organization Oxfam International. At the same time, the study found, only 10 of those 200 companies have made public statements in support of paying a living wage. In contrast, CEO pay — often bolstered by company shares — has soared by nearly a third for those companies since 2018, according to Oxfam. For some of those companies, the average CEO-to-worker pay ratio is now above 1,500 to 1, the nonprofit confederation found. Read more: CNN
Chinese leader Xi Jinping met more than a dozen US CEOs and academics on Wednesday as Beijing renewed efforts to woo back foreign investors and mend strained relations with the United States. Foreign direct investment in China has slumped in recent months as a combination of slower growth, regulatory crackdowns, onerous national security legislation and questions about the country’s long-term growth prospects have shaken confidence in the world’s second biggest economy. The group included Cristiano Amon of Qualcomm, Raj Subramaniam of FedEx and Stephen Schwarzman of the Blackstone Group. About 100 global CEOs, as well as the heads of international organizations such as the International Monetary Fund and the World Bank, were in the Chinese capital this week for the annual China Development Forum. Read more: CNN
Finally, Capital Markets News
In 57 trades recorded yesterday, 58,189 shares were transacted resulting in a turnover of K597,252.84. The following price changes were recorded yesterday: +K0.45 in Standard Chartered Bank Limited and +K0.01 in Zambia Sugar. Trading activity was also recorded in AECI, CEC Zambia, Chilanga Cement, National Breweries, Zambeef, ZANACO and ZAFFICO. The LuSE All Share Index (LASI) closed at 12,690.33 points, 1.38% higher than it’s previous close at 12,517.27 points. The market closed on a capitalization of K97,705,924,943.52 including Shoprite Holdings and K62,923,239,503.52 excluding Shoprite Holdings.
24 Govt Bond trades with total face value of K86,239,000 were processed yesterday, resulting in a total turnover of K54,642,280.
