Novi weekly wrap up - March 14th Edition

Kwacha intervention: Bank of Zambia upped the reserve ratio to 14% as of Monday and also released $178m to help combat Kwacha depreciation.

So BoZ went for a combination of indirect and direct intervention to halt the recent Kwacha slide. Spot Kwacha was trading at K6.01 to dollar today after appreciating to as high as K5.92 on Tuesday. The BoZ governor also announced that gross international reserves decreased from January 2014 by 2.8% to $2.673bn at the end of February 2014. We’ll keep an eye on this – see how it plays out.

Weak appetite for GRZ Treasury Bill auction 5 of 2014.

A paltry 110.1m was bid by various players resulting in K110.2m being allocated. The weaker appetite could have been a response from commercial banks to the increase in reserve ratio to 14%. Will we continue to see this weakening of appetite for GRZ securities? We won’t have to wait long to find out! (Auctions are done every 2 weeks).

Cabinet reshuffle: Bob Sichinga ends up at initial post

A pretty big Cabinet re-shuffle was done seeing which saw the Agriculture minister end up at his initial ministry – Commerce & trade. In the private sector, when employees are underperforming, they are let go and somebody else who is more productive takes up their spot. Will these moves positively shake things up for the government? <fill in blank>

Standard Chartered Banks Private Equity arm takes a 25.8% stake in Copperbelt Energy Corporation.
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Copperbelt Energy Corporation is not only doing well in Zambia but positioning themselves to take advantage of opportunities in other African countries. Stanchart’s PE arm invested $57m. They recently had a rights issue – they are one to watch (or buy shares).

Earnings: Lafarge Zambia and Zambia National commercial Bank reported profits for FY 2013.

Lafarge – Net profit was up 14.5% year-over-year to K338m driven by strong revenues which came in at K1.13bn (up 14% year-over-year). Strong debut by the new CEO Emmanuel Rigaux who took over the role in August 2013.

Zanaco – Net profit was up 19% year over year to K186m strong growth in interest and commission income (total income was up 17% year-over-year to K837.6m).

  FYI these 2 particular companies are a pretty good indicator of how well the economy did in 2013.

The LuSE all-share index is up 3.4% for the week to 5,536.81. Gains were seen in Lafarge Zambia (+17.6%) and Zambian Breweries (+5.9%). No losses were recorded. Could the index emulate the Kwacha and breach the 6,000 mark this year? ;)