Economic growth slowed down to 3.7% in 2015 primarily due to the negative effects of prolonged load-shedding in the second half of the year as well as a significant decline in the currency.
REIZ 2015 Net Profit Increases 953% Y/Y to K453M on Accounting Adjustment as it Mulls Offers for Majority Stake
Real Estate Investments Zambia (LuSE: REIZ) saw net profit rise by a multiple of 10 year-on-year (y/y) in 2015 to K453 million. Earnings per share came in at K8.02 (K0.75 in 2014):
Lafarge Zambia (LuSE:Lafarge) saw net profits decline by 23.9% year-on-year to K323 million in 2015. Earnings per share came in at K1.61 (K2.12 in 2014):
2015 started off with a bang – a tightly contested and peaceful presidential by-election coupled with the economic stimulus of a reduction in fuel pump prices. One can be forgiven for thinking things could only get better from there. Unfortunately, that was not the case.
Here is a recap of some of the factors that shocked the Zambian economy and their subsequent effects:
Copper, the country’s main foreign exchange earner (accounts for 70% of earnings), saw its price drop by 25% to end the year at about $4,701 per MT as a result of a slowdown in Chinese demand:
Zambia Starts Sale of $131 Million Stake in State Mining Company
Zambia, Africa’s second-biggest copper producer, began the sale of a 17 percent stake in its mining investment company that’s expected to fetch about one-billion kwacha ($131 million). An offer of about 27 million shares prioritizing Zambian investors opened Friday and closes Oct. 2, said Jimmy Mwambazi, corporate finance manager at Stockbrokers Zambia Ltd., which is managing the sale. (Read more)
Kwacha falls to record low against US dollar
The Zambian Kwacha (ZMW) fell 3.5% this week and hit a record low of K7.87 before settling at K7.85 to the US dollar:
The Lusaka Stock Exchange (LuSE) has had a very sluggish first half of the year. The index declined by 5.2% to close at 5,842.08 as at June 30 2015:
Market capitalisation fell by K1.7 billion ($237 m). At least 3 Initial Public Offerings (IPO) were supposed to have occurred with Finance Bank Plc leading the charge but only Ikulileni Investments Plc filed for one which failed to meet its goals (after receiving some bad press). The Industrial Development Corporation (IDC) was looking to offload the Governments 30% stake in Afrox Zambia to the public but nothing has happened to date. The potential acquisition of Finance Bank Plc by Atlas Mara could also shelf any IPO plans.
Ikulileni Investments Plc is set to list their shares on the Lusaka Stock Exchange (LuSE) in what will be the first Initial Public Offering (IPO) of 2015. The IPO will raise a total of K354 million should the offering be fully taken up. Ikulileni will be listed under the ticker ‘Ikul’ and will become the 24th company listed on the LuSE.
2014 has been a bit of a rollercoaster year for Zambia. The country lost President Michael Chilufya Sata to illness a few days after celebrating its 50th year of existence. The consumer was under tremendous pressure as the effects of a weaker Kwacha took hold over the course of the year.
Lusaka Stock Exchange-listed Zambeef Products Plc released their 2014 annual report which had revenues up 3 % year-over-year at K1.64 billion with a pre-tax loss of K21.2 million after being firmly in the black last year. Earnings per share (EPS) was of course at negative K0.0992:
Trying to decipher this puzzle that is Zambia by using a variety of publicly available data (structured and unstructured) in conjunction with my own skill/experience. * * *