The last two weeks of trading in the Zambian capital markets saw the Corporate Bond Market continue to dominate the Equities Market with the former taking up 85% of all sales in the final week of November 2019.
Equity Market Update
In the week ended 22 November 2019, a total of 5,031,739 shares were transacted in 51 trades, yielding a market turnover of K2,370,873. Trading activity was recorded in AEL ZAMBIA, AIRTEL, CEC ZAMBIA, LAFARGE, PUMA ,STANDARD CHARTERED BANK, ZANACO, ZAMBREW, ZAMSUGAR and VGIP on the quoted tier. The LuSE All Share Index (LASI) closed at 4,259.50 points. In week 4, the market closed on a capitalization of K56,534,726,027 including Shoprite Holdings and K22,295,520,047 excluding Shoprite Holdings.
In the week ended on the 29th November 2019, a total of 162,971 shares were transacted in 76 trades, yielding a market turnover of K175,893. Trading activity was recorded in AEL Zambia, AIRTEL, Copperbelt Energy Corporation, Lafarge, Standard Chartered Bank Limited, PUMA, ZAMBEEF and CCAF ZAMBIA on the quoted tier. The LuSE All Share Index (LASI) closed at 4,259.02 points. In week 5, the market closed on a capitalization of K56,532,725,628 including Shoprite Holdings and K22,293,519,648 excluding Shoprite Holdings.
Bond Market Update
During the 4th trading week, bonds of total face value of K31,206,000 were transacted in 12 trades, yielding a market value sales of K19,118,000.
During the 5th trading week, bonds of total face value of K1,292,000 were transacted in 1 trade, yielding a market value sales of K999,280.
Perspective
The second half of November will be remembered as the month the Central Bank made its case on the importance of fiscal fitness being in tune with monetary policy. Liquidity over the last two quarters has been weak and this is seen by the weakening performance of the Corporate Bond market that has seen sales gradually reduce over the last couple of months with November being the weakest month of bond trading.
Investors are concerned about rising inflation and upward revision of the Monetary policy rate which inevitably raises the cost of borrowing. A rise in either interest rates or the inflation rate will tend to cause bond prices to drop, which is partly the reason why appetite for corporate bonds has reduced (aside from tightening liquidity). This inevitably feeds into the reason why the purchasing managers index continues to signal weakening productivity.
The equities market, on the other hand, has seen Q4 outperform all the other quarters before December 2019 trading even commences. This is because of the larger volume transactions being made in October and November with some premium stocks being traded.
However, the LuSE All-Share index has weakened over the last couple of months and this can be seen in the number of securities that have seen share prices fall.
Important Announcements
Pursuant to section 3.59 of the LuSE Listing Requirements, the Board of Directors of
Puma Energy Zambia Plc (“the Board”) wishes to announce the resignation of Mr Gregoire
Charmetant as a Director of the Board effective 20th November 2019.
Yet another cautionary note from Prima Re
Further to the cautionary announcement dated 25th September 2018, shareholders are advised that
there are circumstances relating to Prima Reinsurance Plc (the “Company”), the full impact of which
are currently being determined, and that this may have a material effect on the price of the
Company’s securities.