Good afternoon. Here’s what you need to know
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StanChart Mulls Sale of Units in Zambia, Uganda and Botswana
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IMF Austerity Measures Pose Negative Impact on Zambia’s Public Service Delivery
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US third-quarter economic growth unrevised at 2.8%
In Local Business and Finance News
The Zambian Kwacha rebounded on Tuesday against the United States dollar in the spot market, according to Bloomberg data. However, this rebound was likely to be short-lived given that the dollar remained broadly strong amid the Donald Trump trade and expectations that the Fed would proceed more gradually with rate cuts. More localised factors such as the ongoing drought would also continue to apply pressure to the local currency as the import bill rises and foreign reserves are depleted. Absa bank Zambia, on the other hand, reported that the Kwacha gained in Tuesday’s market session owing to an uptick in greenback supply by large corporates against prevailing demand. “At 08:30am, the ZMW was quoted at K27.550/27.600 on the bid-offer and proceeded to close market on the same levels. The short term is expected to see the currency pair trade steady subject to forces of supply and demand,” according to the Bank in its daily market update. Read more: Zambia Monitor
Standard Chartered Plc is exploring a potential sale of its wealth and retail banking businesses in a trio of African countries to free up cash that it will plow into other parts of the business. The lender is exploring sales of those units in Botswana, Uganda and Zambia, according to a statement. The bank said any impact from the proposed exits would not be material to its financial results. The sales would be the first in a small number of potential business exits. The London-based lender has doubled assets under management in its wealth business on the African continent in the past three years, but that growth has largely been fueled by its business in Kenya and Nigeria. Botswana, Uganda and Zambia don’t rank among the top 10 wealthiest countries in Africa, according to the consultancy Henley & Partners. “We continually assess the efficacy of our global business model and regularly take action to concentrate resources where we have the most distinctive client proposition,” Chief Executive Officer Bill Winters said in the statement. “We are confident that the greater concentration resulting from the proposed sales will help us to continue to outperform the market.” The bank has shrunk parts of its business across Africa in recent years, offloading units in Zimbabwe, Angola, Cameroon, Gambia, Sierra Leone, Jordan and Tanzania. Read more: Bloomberg
A latest study conducted by ActionAid Zambia has revealed that the International Monetary Fund (IMF’s) Extended Credit Facility (ECF) reforms have had negative effects on various sectors of the economy such as education, petroleum and mining. The Research titled: “An Analysis of the IMF’s ECF and Austerity Impacts on Government Policy and Service Delivery,” highlights the far-reaching consequences of austerity measures on public service delivery to vulnerable groups such as unemployed youths, women, and children. Presenting the Research findings in Lusaka, Action Aid Zambia Consultant, Thomas Mwimba noted that from the time Zambia joined the IMF Programme, vulnerable groups have been disproportionately affected by policy impacts. Mr. Mwimba observed that the ECF have resulted in contractionary fiscal and monetary policies, which have had negative effects on access to finance for Small and Medium Enterprises (SMEs). “Despite critical in restoring fiscal fitness and macroeconomic stability, contractionary fiscal and monetary policies from the IMF Programme have negative effects on the economy, particularly on vulnerable groups,” Mr. Mwimba stated. Read more: MoneyFM
Government says it has made progress in securing export markets for beef to Angola and the Democratic Republic of Congo -DRC. Fisheries and Livestock Permanent Secretary Hiimba Cheelo says following the establishment of beef compartments in the country, government will in the next two weeks undertake an official visit to Angola and DRC to open and expand trade channels. Ms. Cheelo says the initiative to export beef does not only represent an economic opportunity for the country, but also demonstrates the leadership and vision of government in advancing regional trade and strengthening the agriculture sector. The Permanent Secretary said this in a speech read on her behalf by Director of Marketing, Shadreck Mungalaba, during the stakeholder consultation meeting for the export of beef to Angola and DRC markets held at Government complex. And an International Livestock Consultant, Misheck Mulumba said the private sector must take a leading role in ensuring lucrative markets are established and guaranteed. Read more: ZNBC
In International News
The U.S. economy grew at a solid clip in the third quarter, the government confirmed on Wednesday, amid robust consumer spending. Gross domestic product increased at an unrevised 2.8% annualized rate, the Commerce Department’s Bureau of Economic Analysis said in its second estimate of third-quarter GDP. Economists polled by Reuters had forecast GDP would be unrevised. Slight downward revisions to consumer spending, government outlays and exports, were offset by upgrades to private inventory accumulation, business investment as well as state and local government spending. Read more: Reuters
US stocks have hit record highs despite United States President-elect Donald Trump’s pledge to impose sweeping tariffs that threaten to upend international trade. The S&P 500, which measures the performance of 500 of the biggest US firms, rose 0.57 percent on Tuesday to top its previous high set on November 11. The tech-heavy Nasdaq Composite climbed even higher, gaining 0.63 percent. The Dow Jones Industrial Average, which tracks 30 large companies including Microsoft, McDonald’s and Goldman Sachs, rose 0.3 percent. Some big-name individual stocks fell, including General Motors and Ford Motor, both of which import vehicles from Mexico, a target of Trump’s tariff threats. Stock exchanges in Tokyo, Shanghai, Sydney, London, Paris and Frankfurt all closed lower on Tuesday, while currencies including the Canadian dollar, Mexican peso, Chinese yuan and the euro fell against the US dollar. Read more: Al Jazeera
The Tanzanian government has decided to proceed with the contract terms agreed upon with Adani group, despite ongoing controversies surrounding the Indian-owned company. According to Reuters, a senior official from the country’s ports authority confirmed that Tanzania would continue with the projects involving a unit of the Adani conglomerate, even after U.S. authorities indicted billionaire chairman, Gautam Adani on charges of bribery and fraud. It is important to note that Gautam Adani, along with his nephew, were recently indicted by the U.S. government for their alleged involvement in a $265 million scheme to bribe Indian officials in order to secure power-supply contracts. Read more: Business Insider
TotalEnergies will pause investment in its Adani Green energy project until there is further clarity on a U.S. bribery case against Indian billionaire Gautam Adani, the French group’s CEO, Patrick Pouyanne, said on Tuesday. The French company, which holds close to a 19.8% stake in Adani Green, has other options in its portfolio to meet its renewable energy growth targets, Pouyanne told Reuters on the sidelines of the Energy Intelligence Forum. Pouyanne emphasised that his company was not quitting the project, but that it will not be providing financing for any new scheme. TotalEnergies said on Monday that it had not been informed about a U.S. investigation into possible bribery and corruption at Adani Green Energy Limited, adding that it will stop financial contributions to its Adani Group investments after last week’s indictment. Read more: Reuters
Finally, Capital Markets News
In 154 trades recorded yesterday 1,449,773 shares were transacted resulting in a turnover of K20,140,847.96. The following price changes were recorded yesterday: -K0.01 in ZANACO. Trading activity was also recorded in Airtel, Bata, CEC Zambia, Chilanga Cement, Madison Financial Services, PUMA, Standard Chartered Bank Limited, ZCCM, Zambeef, Zambia Sugar as well as CEC Africa and Pamodzi on the quoted tier.
The LuSE All Share Index (LASI) closed at 15,836.95 points 0.02% lower than the previous trading day close. The market closed on a capitalization of K205,861,271,352.10 including Shoprite Holdings and K80,860,995,552.10 excluding Shoprite Holdings.
A total of 12 Govt Bond trades with a total quantity of K24,190,000 and turnover K18,964,320 were processed yesterday.
