Dividends Overview

Dividend activity in the first half of 2025 highlighted the resilience of Zambia’s top companies in sustaining shareholder returns despite mixed earnings trends. Airtel Zambia stood out with an interim payout of ZMW 3.51 per share, reaffirming its reputation as a high-growth, high-cash-generating stock. Copperbelt Energy Corporation (CEC) also declared a generous interim dividend of USD 0.039 per share, reflecting both operational strength and confidence in long-term demand.

Meanwhile, ZCCM-IH approved a final dividend of ZMW 3.29 per share in July, to be paid in August 2025, rewarding shareholders despite reporting a half-year loss. Zanaco, true to its track record as a reliable income stock, declared a final dividend of K 0.438 per share in March, which was paid in May. Together, these distributions show that dividend-paying firms remain a cornerstone of investor appeal on the LuSE, balancing market volatility with consistent returns.

Government Securities

T-Bills: August Shows Firm Demand and Stable Rates

August treasury bill auctions reflected steady investor confidence with a continued preference for longer maturities. The first auction on 7 August 2025, Tender No. 16/2025, attracted total bids worth K2,112.70 million against an offering of K2,200 million. As in previous months, the 364-day bill dominated demand with bids of K1,404 million compared to an offering of K730 million, showing that investors still favour locking in funds for longer terms.

The second auction on 21 August 2025, Tender No. 17/2025, reinforced this trend. Total bids rose to K2,365.12 million, again close to the targeted amount. The 364-day bill once more drew the most attention, attracting K1,530 million in bids against an offering of K730 million.

Cut-off yields were unchanged for the fourth consecutive month, remaining at 11.5 percent for the 91-day bill, 12.0 percent for the 182-day bill, 13.5 percent for the 273-day bill and 14.5 percent for the 364-day bill. This reflects the Bank of Zambia’s decision to keep short-term rates steady in order to balance liquidity management and inflation control. Overall, August confirmed that the T-bill market is holding steady with investors cautious but still willing to commit funds, particularly for longer-term paper.

Zambia’s Bond Market: August Auction Oversubscribed with High Yields

Zambia’s government bond market also showed strong performance in August 2025, marked by oversubscription and continued appetite for long-dated instruments. The auction held on 15 August 2025, Tender No. 08/2025/BA, offered a total of K1,800.00 million and received bids worth K2,057.44 million. Allocations came to K2,039.32 million, indicating that demand comfortably exceeded supply.

The results revealed consistent interest across all maturities but the strongest participation was concentrated in the 5-year, 7-year, 10-year and 15-year bonds. The 5-year bond recorded bids of K708.18 million against an offer of K370.00 million, while the 7-year bond saw K357.10 million in bids compared to an offer of K260.00 million. The 10-year bond attracted K343.80 million in bids with K260.00 million on offer, and the 15-year bond received K304.56 million in bids against K230.00 million offered.

Cut-off yields were in line with the premium investors continue to demand. The 5-year bond cleared at 18.0 percent, the 7-year at 18.49 percent, the 10-year at 19.0 percent and the 15-year at 20.2 percent. Shorter tenors such as the 2-year and 3-year papers cleared at 15.5 percent. These figures show that while investors are willing to commit funds for the long term, they continue to price in risk by demanding elevated yields.

The August outcome confirmed that the rebound seen in June and July has carried through. Participation remains firm and confidence in government securities is holding, supported by easing inflation trends and stable monetary policy. However, the persistence of high yields suggests that investors remain cautious and are waiting for stronger signals on fiscal discipline and further inflation moderation before lowering their return expectations.

Top News

Zambia Signs $300m Joint Venture to Electrify Lobito Corridor

Zambia has inked a landmark $300 million joint venture agreement aimed at electrifying the Lobito Corridor, a vital regional transport route connecting Zambia to Angola’s Atlantic coast. The investment will upgrade energy infrastructure and extend grid coverage along the corridor, which has been earmarked as a strategic trade artery for copper exports and regional commerce. The project underscores Zambia’s commitment to leveraging energy and logistics partnerships to unlock greater competitiveness in international markets.

The electrification initiative is also expected to catalyze industrialization and create new opportunities for communities along the corridor, particularly in mining and agribusiness supply chains. By ensuring reliable and sustainable power for both freight and local industries, the deal positions Zambia to attract fresh investment and reduce logistics costs for exporters.

Government Appoints ZCCM-IH as Gold Sector Custodian

The Government of Zambia has formally appointed ZCCM Investments Holdings Plc (ZCCM-IH) as the custodian of the country’s gold sector, giving it a central role in overseeing, formalizing, and scaling operations in a subsector long dominated by informal mining. The appointment underscores government efforts to position gold as a strategic mineral alongside copper, boosting revenue, transparency, and employment creation.

Monetary Policy: Bank of Zambia Holds Rate at 14.5%

The Bank of Zambia (BoZ) opted to hold the Monetary Policy Rate (MPR) steady at 14.5%, despite recent disinflation trends. Inflation slowed to 13%, its lowest level in nearly two years, offering some relief to households and businesses. Still, the BoZ signaled caution, stressing the importance of anchoring expectations and ensuring that price stability is firmly entrenched before easing further.

First Quantum Shelves Stake Sale After $1bn Gold-Streaming Deal

First Quantum Minerals has dropped plans to sell minority stakes in its Kansanshi and Sentinel copper mines in Zambia after securing a $1 billion gold-streaming deal with Royal Gold Inc. The agreement will see Royal Gold purchase a portion of Kansanshi’s gold output, immediately strengthening First Quantum’s balance sheet. The company had initially floated a partial divestment following financial pressures from the forced shutdown of its flagship Panama mine.

Cost of Living Eases Slightly

The latest Basic Needs and Nutrition Basket (BNNB) from the Jesuit Centre for Theological Reflection (JCTR) shows a small relief in August 2025. The cost of essentials for a family of five in Lusaka fell to ZMW 11,441.41 from July’s ZMW 11,602.37. This represents a drop of ZMW 160.96 or about 1.4 percent. This follows July’s 1.37 percent decline and comes after a sharp 4.4 percent increase in June. Since January 2025, when the basket stood at ZMW 10,800.57, costs have still risen by about 7.4 percent.

Regional disparities: Lusaka remains the most expensive, with its basket cost almost double that of Mongu at ZMW 5,889. Choma recorded a 25 percent rise in the first half of 2025. These differences highlight problems in market access, transport networks and supply chains.

The wage gap challenge: The average formal sector wage in Lusaka is ZMW 7,731. This is ZMW 3,710 less than the August BNNB. Even middle-income families are struggling to cover their basic needs, forcing trade-offs between food, school fees and healthcare.

Policy implications: The small drop in August offers little long-term comfort. Without investments in local production, transport systems and pricing reforms, the cost of living crisis will persist. Both short-term relief and long-term structural solutions are required to close the affordability gap.

Exchange Rate and Inflation

Exchange rate: The kwacha remained stable in August. It traded in the range of ZMW 23.6 to 23.9 per USD, showing resilience despite higher corporate demand for dollars.

Inflation trends: Annual inflation fell further to 12.6 percent in August from 13.0 percent in July. This marks the fourth consecutive month of decline. Food inflation slowed to 14.9 percent from 15.3 percent in July. Non-food inflation eased to 9.3 percent from 9.7 percent. On a monthly basis, prices rose only 0.5 percent.

Monetary policy: The Bank of Zambia kept the policy rate at 14.5 percent. Inflation is expected to average 13.3 percent in 2025 and drop into the 6 to 8 percent target band by the first quarter of 2026.

Outlook: Maintaining this trend will require discipline. External risks such as commodity price changes and currency volatility remain. Strengthening local production, supply chains and prudent public spending will be critical to sustaining progress.

Conclusion

August 2025 was a standout month for Zambia’s financial markets, with LuSE delivering record gains and ranking among the world’s top-performing exchanges. Strong copper production, a firm kwacha, and improving economic fundamentals fueled investor confidence, while fixed income markets showed robust demand. Although challenges such as market depth and external risks persist, the outlook remains positive as Zambia continues to attract both local and foreign investment.