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Moody’s Cuts Afrexim Rating on Zambia, Ghana Debt Reworks
Citi Sees Zambian Kwacha Rally Extending If Copper-Price Link Restored
Zambia’s economic outlook improving – World Bank
In Local Business News
World Bank Country Manager for Zambia Dr Achim Fock says the country’s economic outlook is improving with robust momentum in the mining sector, and a rebound in agriculture, among others. Speaking during the Launch of the Zambia Economic Update, Tuesday, Dr Foch however noted that significant risks persist due to lower global growth, uncertainties in trade policies, and climatic events. “Zambia’s economy showed resilience last year, expanding by four per cent despite the historic drought and associated load shedding, largely due to mining and services growth. Looking ahead, the outlook is improving, with robust momentum in the mining sector, a rebound in agriculture, and improvements in tourism." Read more: News Diggers
Zambia’s currency appears set for sustained gains if its correlation with the copper price is restored, Citigroup Inc said. The kwacha has strengthened almost 16% against the dollar this year, making it one of the continent’s top performers, data tracked by Bloomberg shows. Zambia is Africa’s second-largest producer of copper, which has appreciated 13% over the period. “Essentially a high copper price is seen as good for Zambia, which tends to encourage a generally positive market sentiment toward the kwacha,” David Cowan, the bank’s chief Africa economist, wrote in a note to clients. The US-based lender expects copper prices to remain elevated over the long-term. The kwacha was negatively impacted by the southern African nation’s 2020 debt default, resulting in “a breakdown” in its link to the copper price, Cowan added. “However, if this relationship is restored, then there is no reason not to assume that we are about to enter a prolonged period of kwacha appreciation, or at least “volatile-stability,” he said. “Unless the country is hit by another political or economic shock, whether domestic or external, which more substantially undermines sentiment toward the kwacha.” Read more: Bloomberg
Moody’s Ratings cut its assessment of African Export-Import Bank’s debt closer to junk status, a month after Fitch Ratings did the same, citing a weaker-than-expected asset performance. The ratings company lowered Afreximbank to Baa2 from Baa1, it said in a statement on Tuesday. That’s two steps from being rated speculative, which would limit the pool of funds allowed to invest in the lender’s debt. Moody’s also changed its outlook to stable from negative. Fitch last month adjusted its assessment to BBB- from BBB. The Cairo-based lender didn’t immediately respond to an emailed request seeking comment. The yield on the lender’s dollar bonds due 2031 rose 1 basis point to 6.70% after climbing more than 30 basis points in the past month. Read more: Bloomberg
Africa GreenCo and AXIAN Energy have signed a Heads of Terms for a long-term Power Purchase Agreement (PPA) to support the development of two grid-connected solar PV projects totalling approximately 250 MW in Zambia. This marks a major step forward in Zambia’s efforts to expand access to clean, affordable, and dependable electricity. The transaction introduces private sector investment without reliance on government guarantees, reflecting growing confidence in Zambia’s energy reforms. Developed with the support of Standard Bank, this bankable structure shows how public-private collaboration can unlock scale and impact in Zambia. Read more: Green Building Africa
In International News
The U.S. dollar will remain weak over the coming months, a Reuters poll of FX analysts forecast, caught in a tangle of mounting U.S. debt concerns, erratic tariff policies and rising interest rate cut expectations. Growing unease over President Donald Trump’s on-again off-again tariffs, and a tax-cut and spending bill that is expected to add $3.3 trillion to the national debt, have led to a scurry of investor outflows from dollar-denominated assets in recent months. A surge in the "term premium" - compensation investors demand to hold longer-term debt - has also contributed to a nearly 11% dollar decline against a basket of major currencies this year and to a three-and-a-half-year low against the euro and sterling last week. Recent data from the Commodity Futures Trading Commission also showed the short-dollar trade was at a near two-year high, suggesting further weakness may be in the offing. Read more: Reuters
South Africa must accelerate structural reforms to offset global challenges that include US President Donald Trump’s trade war, the African Development Bank said as it cut the nation’s economic forecast. It lowered its forecast for Africa’s most-industrialized economy to a meager 0.8% this year from a previous estimate of 1.6%, the Abidjan-based lender said in an update to its Country Focus Report for South Africa. “This is mainly on the fact that we expect trade tensions to pretty much affect net exports negatively,” AfDB country economist Akhona Peter said on Wednesday at an event near Pretoria. Other risks to the outlook include funding cuts for development assistance and an economic slowdown in China. South Africa’s Treasury in May trimmed its growth forecast for the year to 1.4% from a prior 1.9%, citing geopolitical tensions including Trump’s trade levies. The US is South Africa’s second largest export destination after China. The country faces a 31% US import tariff which is expected to be reinstated on July 9 after it was initially postponed. Trump said on Wednesday that he is not considering delaying them again. Read more: Bloomberg
Nigerian economic reforms have improved investor sentiment but the nation’s finances are being hurt by lower oil prices that will widen its budget gap this year, said the International Monetary Fund. Africa’s biggest crude producer could see its fiscal deficit reach 4.7% of gross domestic product in 2025 from 4.1% in 2024, according to IMF staff projections released on Wednesday. “The 2025 budget was based on optimistic hydrocarbon revenue projections, even before the price decline since April,” the IMF said. “Absent policy actions, the fiscal deficit in 2025 would exceed budget expectations.” Nigerian lawmakers approved a 55 trillion naira ($35.9 billion) spending plan in February based on an oil price of $75 per barrel and output of 2.06 million barrels per day. Prices have since fallen below $70 and crude production has averaged about 1.5 million barrels a day. The IMF in its report recommended Nigeria adopt a ‘neutral fiscal stance” to safeguard economic stability that cuts spending and focuses investment on projects that make the biggest contributions to growth and employment. Read more: Bloomberg
Banknotes issued by the Bank of England are about to get their first major redesign in more than 50 years. Notable historical figures, such as Sir Winston Churchill on the current fiver, have featured on these banknotes since 1970 but could be on the way out. The public are being asked for their views on new themes, such as nature, innovation, or key events in history. It raises the possibility of British birds, bridges, or bangers and mash featuring on the next series of £5, £10, £20 and £50 notes. Read more: BBC News
The United States could reach a trade deal with India that would help American companies compete in the South Asian country and leave it facing far lower tariffs, President Donald Trump said on Tuesday, while casting doubt on a possible deal with Japan. Trump told reporters aboard Air Force One that he believed India was ready to lower barriers for U.S. companies, which could pave the way for an agreement staving off the 26% rate he announced on April 2, before pausing it until July 9. "Right now, India doesn't accept anybody in. I think India is going to do that, if they do that, we're going to have a deal for less, much less tariffs," he said. Earlier, Treasury Secretary Scott Bessent told Fox News that the U.S. and India are nearing a deal that would lower tariffs on American imports to the South Asian country and help India avoid levies from rising sharply next week. "We are very close with India," Bessent told Fox News in response to a question about progress on trade negotiations. Read more: Reuters
Finally, Capital Markets News
In 325 trades recorded yesterday 154,822 shares were transacted resulting in a turnover of K862,499.13. The following price changes were recorded yesterday: -K0.02 in CEC Zambia. Trading activity was also recorded in the following securities AECI, Airtel, Bata, British American Tobacco Zambia, Madison Financial Services, PUMA, Zambia Breweries, Zambia Reinsurance, ZANACO as well as CEC Africa on the quoted tier.
For the dollar denominated security (REIT): 2 trades with a total quantity of 3,260 shares yeilding a turnover of $263.70 were recorded yesterday. A -$0.01 price change was also recorded. The LuSE All Share Index (LASI) closed at 20,145.02 points, 0.29% lower than its previous close.
The market closed on a capitalization of K295,874,981,058.45 including Shoprite Holdings and K105,802,912,158.45 excluding Shoprite Holdings.
