Novi Weekly Wrap - March 29 Edition

Finance bank brings home the bacon

Finance bank came in with a Net profit of K71m, up a whopping 39% year-over-year. Active customers have grown by 43% to over 150,000. The bank is looking go ahead with two planned IPOs on the Lusaka and the London Stock exchanges. The IPOs were mooted to go through last year so perhaps a pinch of salt but let’s wait and see. Not bad for a bank which was almost sold for a pittance to FNB of South Africa.

Inflation up inches up to 7.7%, trade surplus recorded

Inflation ticked up by 0.1% to 7.7% in March 2014. According to CSO director John Kalumbi, Northern and Muchinga province had the highest provincial contribution of 9.7% each, closely followed by Western province which contributed 9.2%. A trade surplus of K59m was achieved, down 80% from the previous month. Inflation-wise, the Northerners and Westerners once again doing their best to outdo each other!

Bank of Zambia raises policy rate

The central bank increased the policy rate by 175bp to 12% for April 2014. The country has been facing inflation and exchange rate pressures (which are linked because Zambia imports a lot of things). The Kwacha hit a low of K6.42 to the dollar this week, and then settled down to K6.25. How soon will policy tightening translate to material Kwacha gains? It certainly won't be immediate....

Zambia Breweries raises price of beer

As if inflation wasn't kicking Zambians hard enough, Zambia Breweries went on to increase the price of beer ranging from 3.6% to 19% on the recommended retail price of its clear beer (that means Mosi, Castle and Castle Lite). The company cited inflation and the government’s decision to increase excise duty on clear beer in the 2014 national budget. How elastic is the demand for beer in Zambia? We'll certainly find out the full picture when Zambia Breweries released their FY 2013 and to a lager extent 2014 earnings.

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ZCCM-IH completes balance sheet restructuring

ZCCM Investment Holdings finally concluded it's much anticipated balance sheet restructuring as the government (majority owner) converted K1.83bn owed to it into equity. Last year, the company tripled its net asset value by changing the accounting method which they used to value their assets from cost to fair value. Minority shareholders have not been too impressed with the transparency of the entity’s operations but this should bring some good news to them as well.  ZCCM-IH is dual traded on the Lusaka stock exchange and the NYSE Euronext in Paris.

New Minister of Tourism announced

The president appointed Mandevu MP Jean Kapata as Minister of Tourism & Arts, taking over from the recently fired Sylvia Masebo. She was the deputy minister of Community Development and Social Services. Will Hon. Kapata be the tonic that can take a ministry that has been performing below par for far too long to new heights? Can she fire and hire the right people to get the ball rolling? Time and the 2016 elections will have a say on that...

Lusaka Stock Exchange 

The LuSE All Share Index closed Friday at 5,688.15 points down by -0.11% from yesterday's close of 5,694.33 points. Price movements were recorded in REIZ-(K0.20) and SCZ-(K0.01). Trading activity was also recorded in CEC, ZANACO, ZAMEFA and LAFARGE. A total of 11,436 shares were transacted in 12trades resulting in a turnover of K22,390.