This report examined the dynamic shifts observed in bond prices, treasury bills, currency exchange rates, and stock prices throughout November. Additionally, it provided insights into recent updates in the macroeconomic and financial markets, offering a comprehensive analysis aimed at capturing the evolving trends and fluctuations crucial for understanding the current economic landscape. 

STOCK MARKET UPDATE 

TOP TRADERS	PRICE (K)		CHANGE
	1st NOVEMBER	31ST NOVEMBER	K	%
AECI	42.00	41.98	-0.02	-0.05%
CEC	7.60	7.54	-0.06	-0.79%
REIZ	1.12	1.15	0.03	2.68%
ZNCO	3.80	3.53	-0.27	-7.11%
ZSUG	20.00	35.00	15.00	75.00%

Zanaco Board Update 

Mr. Yamfwa Chinyanta retired from the Zanaco Board of Directors effective November 22, 2023, following the end of his tenure on the Board. 

CEC Withdraws Cautionary Statement 

A cautionary statement issued by CEC Secretary Julia C Z Chaila has been withdrawn by the Board. Shareholders were notified about an arbitration against KCM concerning unpaid invoices totaling USD 139,798,529. A Settlement Agreement was reached on June 12, 2023, to resolve the dispute. The arbitral tribunal, headed by Mr. Michael Tselentis, issued a Final Award By Consent on November 3, 2023, officially closing the arbitration and settling all claims under the Power Supply Agreement. 

Zambeef Trading Update 

Zambeef’s full-year trading update projects financial performance for the year ending September 30, 2023, to surpass market forecasts by 5-15%. Profits are estimated to be 30% higher than anticipated. Despite challenges, increased product demand led to growth, albeit impacted by lower prices and higher costs. Exchange rates closed at K21.31/USD compared to K15.9/USD. The financial results, expected by November’s end, remain unaudited externally. 

Bata Interim Dividend 

Zambia Bata Shoe Company Plc declared an interim dividend of K0.39 per share. Zambia Sugar Plc’s 2023 Abridged Report highlighted notable growth in total revenue by 14%, driven by increased selling prices and export sales. 

MACRO-ECONOMIC UPDATES 

Statutory Reserve Ratio 

The Bank of Zambia raised the statutory reserve ratio to 14.5% from 11.5% as of November 13. This applies to both local and foreign currency deposits, including government and vastro deposits, aiming to counter the kwacha’s depreciation due to the growing demand for the dollar. The Bank aims to alleviate persistent foreign exchange market pressure to control inflation. 

Monetary Policy Update 

During the Bank of Zambia MPC presentation on November 22, the Monetary Policy Rate was raised by 100 basis points to 11.0%. Inflation has risen to an average of 11.0% in the third quarter from 9.9% in the second quarter. October saw inflation increase to 12.6% from 12.0% in September. November’s annual inflation stood at 12.9% compared to October’s 12.6%.  

GOVERNMENT BONDS 

In November, bond prices saw a reduction from October prices, however, with slight reductions in the 2-year and 7-year bonds, while the yields increased for the 3-year, 5-year, and 10-year bonds. 

	27th OCTOBER 2023		24th NOVEMBER 2023
BOND TENURE	PRICE	CUTOFF YIELD RATE	PRICE	CUTOFF YIELD RATE
2-Year	K86.9204	17%	86.9154	17.00%
3-Year	K79.4078	21%	74.6324	22.00%
5-Year	K70.4214	22%	66.5136	22.50%
7-Year	K60.2741	24%	60.2537	24.00%
10-Year	K58.1067	25.50%	55.4526	26%
15-Year	K54.0143	26.5%	K52.9301	26.50%

TREASURY BILLS 

Treasury bill prices experienced minor decreases for the 91-day and 364-day bills, leading to a rise in their yield rates. Conversely, the 182-day and 273-day bill prices slightly rose, causing a decrease in their respective yield rates. 

	19th OCTOBER 2023		30th NOVEMBER 2023
BOND TENURE	PRICE (K)	CUTOFF YIELD RATE	PRICE (K)	CUTOFF YIELD RATE
91 Days	97.6982	9.45%	97.6863	9.50%
182 Days	95.3638	9.75%	95.5455	9.35%
273 Days	92.3638	11.30%	92.558	10.75%
364 Days	86.9891	15.00%	86.6494	15.45%

Income Tax Amendment Bill 

The Income Tax Amendment Bill has introduced a 15% withholding tax on discount income earned from Government Securities issued at a discount from Face Value. 

Economic Projections 

According to the Bank of Zambia, the economy is projected to grow faster at 4.3% in 2023, up from the previous forecast of 2.7%. Further expansion by 4.7% in both 2024 and 2025 is expected, supported by anticipated recovery in the mining and agriculture sectors. 

EXCHANGE RATES 

Throughout November, the exchange rates for major currencies notably surged, resulting in a weaker Kwacha. The most significant changes were observed in the Kwacha against the Great British Pound, followed by the Euro, the Dollar, and finally the South African Rand. 

AVERAGE EXCHANGE RATES	3-Jan-23		30-Nov-23
CURRENCY	BUYING	SELLING	BUYING	SELLING
$ USD	ZMW       18.1003	ZMW         18.1456	ZMW     23.7593	ZMW       23.8086
₤ GBP	ZMW       21.6408	ZMW         21.6967	ZMW     30.0745	ZMW       30.2465
€ EUR	ZMW       19.0759	ZMW         19.1310	ZMW     25.9760	ZMW       26.0348
₽ ZAR	ZMW         1.0605	ZMW           1.0635	ZMW       1.2618	ZMW          1.2647

SUMMARY  

The report outlines how fluctuations in share prices directly impact Money Acumen’s clients, signaling potential gains or losses for those invested in various company shares. Additionally, November’s dividend announcements forecast expected income for clients holding shares in specific companies. These stock market updates wield substantial influence over share prices, often driven by speculative forces. Furthermore, macro indicators, especially the policy rate, have a direct impact on local interest rates, especially debt securities, reflecting adjustments in interest rates across the nation. Fluctuations in exchange rates significantly affect investment portfolios, particularly those with international assets, potentially amplifying or diminishing returns. The introduction of a 15% withholding tax on government securities reduces anticipated income, a crucial detail for involved investors. Optimistic economic growth projections boost investor confidence in Zambia’s economy. Comparisons between Treasury bills and bonds provide insights into price and yield rate movements, guiding investment decisions for Money Acumen’s clients. These developments are vigilantly monitored by Portfolio Managers, ensuring strategic adaptations to optimize clients’ investment portfolios amidst evolving economic conditions.