The index is up 0.3% to close at 3,708.6. Turnover for the week increased to ZMK 6bn. Zambeef had a turnover of ZMK 2.7bn representing 44.6% of the turnover. Puma Energy had a turnover of 29.0%. The only gainer for the week was Puma Energy (+15.8%) to close at ZMK 1,205. The top two decliners were Natbrew (-11.1%) to close at ZMK 8,000 and Stanchart Zambia (-4.8%) to close at ZMK 2.00
Zambia sold its USD 750m Eurobond, becoming the latest African country to reduce its dependence on foreign aid and tap international capital to meet its infrastructure funding needs. The maiden 10-year dollar bond was issued with a 5.6% yield. More than USD 11bn of orders were received for the issue. The yield was 25bp tighter than Zambia’s initial 5.9% guidance and compares favourably with that of Senegal, whose 2021 Eurobond is also yielding 5.9%. Zambia plans to use proceeds from the issue to upgrade its infrastructure, particularly in its transport and energy sectors. It is looking to invest over USD 1bn in infrastructure projects, especially roads and rural power. (Source: Reuters)
Earlier this week, Standard & Poor’s (S&P) Ratings Services assigned its ‘B+’ long-term senior unsecured debt rating to the proposed USD 500m bond. S&P assigned a recovery rating of ’3′ to the proposed bond, indicating their expectation of meaningful (50%-70%) recovery in an event of payment default. According to S&P’s criteria, bonds are rated with a ’3′ recovery rating at the same level as the issuer credit rating. The rating on Zambia’s bond was therefore equalized with the ‘B+’ long-term foreign currency sovereign credit rating. (Source: Reuters)
The Zambian government’s decision to privatise the ownership of mines has proven to be economically beneficial in improving the sustainability of the country’s copper mines, as foreign investments have elevated the recovery of Zambia’s mining sector. The mixture of low taxes, privatisation and elevated copper prices has resulted in a substantial boost in investment and output. The Zambia government estimates that the country’s copper output will surpass 1mt a year in 2014 and that copper mining will remain the mainstay of Zambia’s mining sector. The country’s copper output is also expected to increase to 1.1mt in 2016 from the 784 000 recorded in 2011. (Source: miningweekly.com)
Source: African Alliance
