‘Mines must be compelled to list on stock markets'
By Kabanda Chulu
Mon 13 Feb. 2012, 12:59 CAT
MINING companies must be compelled to give Zambian citizens the opportunity to participate in their activities through listing of a certain percentage of shares at the stock markets, says Wala Chabala.
And Dr Chabala, who is chief executive officer at the Securities and Exchange Commission, said Zambians should be allowed to participate in the US$500 million sovereign bond which the country is intending to issue.
Making submissions to the parliamentary economic affairs committee chaired by Zambezi West parliamentarian Charles Kakoma, on the theme ‘Participation of Zambian citizens in economic development', Dr Chabala said there was no better place for local people to participate in national economic affairs than capital markets.
He said measures should be put in place to ensure that citizens were given an opportunity to participate in the largest economic sector of the country.
"It is not acceptable that there is only one company in the mining sector through which Zambian citizens can participate in economic development. Even this opportunity is limited and we submit that unless mining companies are somehow compelled to give Zambian citizens the opportunity to participate in them for economic development, this will never happen," Dr Chabala said.
"We propose that the compulsion be in form of some monetary penalties or putting some restrictions on the mining licence conditions. On the other hand, an incentive could be given, such as a tax concession, where the mining companies afford Zambian citizens an opportunity to participate in economic development through them."
He said there must be no excuse for those multi-national mining and other companies that had already allowed citizens of other countries to participate in them by not extending the same opportunities to Zambians.
"Another economic sector that is key to the economic development of the country and through which Zambian citizens can participate in economic development is the telecommunications industry. Many Zambians have a mobile phone for which they spend thousands of kwacha per week to use for communication," Dr Chabala said.
"Mobile telephony companies also spend billions to promote their products but there are sentiments that these companies should stop giving out these billions and allow Zambians to participate in their ownership and those billions could be distributed as profits shared among a cross section of Zambian citizens in form of dividends."
Dr Chabala proposed that Zambians had demonstrated capacity and should be allowed to participate in the sovereign bond by having a proportion of it issued in the Zambian capital markets.
Labels: LUSE, MINING
Read more...
State ponders ZCCM-IH listing on LuSE
TIME PUBLISHED - Friday, January 6, 2012, 9:02 am
GOVERNMENT says it will consider a full listing of ZCCM-Investment Holdings (ZCCM-IH) shares on the Lusaka Stock Exchange (LuSE) after the restructuring exercise is finalised.
ZCCM-IH has been a quoted company on LuSE for a long time and there are calls from various stakeholders to have the firm fully listed for the public to participate in the ownership.
Minister of Mines Wilbur Simuusa said a positive decision will be made as soon as the restructuring exercise is completed.
“Yes we are considering that (full listing) although it will be done after the restructuring process is completed. We have to ensure that the books, the balance sheet are worked on to enable us to do it,” he said.
Mr Simuusa said this in an interview in Lusaka on Wednesday.
He said ZCCM-IH has not posted profits or given dividends since its inception over 10 years ago and Government plans to re-brand the organisation to make it operate profitably and promote local participation in the ownership and management of mining assets.
He said a meeting will soon be convened with a technical committee to map out a way forward.
The minister, however, said currently Government is not in a position to decide whether the firm’s shares should be fully listed on the local bourse.
Mr Simuusa said ZCCM-IH is an important unit which, if properly managed, can help the country realise huge benefits from the mining resources.
[Zambia Daily Mail]
Labels: LUSE, WYLBUR SIMUUSA, ZCCM-IH
Read more...
First Quantum Mineral lists today on LuSE
TIME PUBLISHED - Wednesday, July 20, 2011, 5:18 am
FIRST Quantum Minerals’ Zambian Depositary Receipts (ZDRs) are expected to be listed and admitted to trading on the Lusaka Stock Exchange (LuSE) today, the mining company has said. The company says the ZDRs will trade on the LuSE under the symbol FQMZ (ISIN ZM0000000375), according to a statement issued by the company and availed to the Mail yesterday.
“Further to prior announcements, Renaissance Capital and First Quantum Minerals (FQM) Limited are pleased to confirm that following closure of the offer period, First Quantum’s Zambian Depositary Receipts will be listed and admitted to trading on the Lusaka Stock Exchange from 09:00 on Wednesday July 20, 2011.”
“Each ZDR will represent interests in First Quantum’s underlying Common Shares (TSX: FM). An allotment announcement with full details of the listing will be published prior to listing,” the company said.
LuSE chief executive officer Beatrice Nkanza hailed First Quantum for becoming the first mining company to issue shares on the local stock exchange, adding that the listing avails Zambians the opportunity to invest directly in the company.
“The capital market is very excited about this development and establishes the LuSE as a prime listing destination for multinational mining companies operating in the region,” she said.
Commenting on the listing, Pangaea Renaissance Securities Limited chief executive officer Ceaser Siwale said, “The First Quantum listing has been very well received by Zambian investors, and we at Renaissance Capital are delighted to have worked with First Quantum to bring this landmark transaction to the Zambian market.”
Renaissance Securities are the book runners for FQM.
FQM resident director Kwalela Lamaswala said the listing is in recognition that Zambians are important stakeholders of First Quantum and creates another way for Zambians to identify with and participate in the growth of the company.
And THERE was impressive activity on the Lusaka Stock Exchange (LuSE) last week with turnover sky-rocketing to a massive K25 billion from the previous week’s K8.7 billion.
According to LuSE Weekly News for July 15, 2011, a total of 9, 558,050 were transacted in 182 trades, yielding a total turnover of K25 billion.
This is compared to 2,747,950 shares that were transacted in 64 trades yielding over K8.7 billion.
LuSE attributed the highest volume to trades in Shoprite shares amounting to 4,248,189 shares worth K17 billion.
Overall trading activity occurred in 15 listed stocks namely; BP Zambia, Cavmont Chartered Holding Zambia, Copperbelt Energy Corporation, Lafarge Cement Zambia, Farmers House, Investrust, Standard Chartered Bank Zambia, Zambeef Products and Zamefa.
Trading activity also occurred in Zambian Breweries, Zanaco Bank, Zambia Sugar, African Explosives Limited Zambia and BATA Shoe Company.
LuSE indicates that the all-share index closed at 3,931.47 points down by negative 1.45 percent from 3,989.43 points over the previous week ending July 8, 2011.
On year-to-date in Kwacha terms, the index which measures performance of stocks on the stock market rose by 18.99 percent. The stock exchange also recorded 2,450,139 rights worth K247,014 in Investrust letters of allotment.
Labels: CEASER SIWALE, FIRST QUANTUM MINING, LUSE, PANGAEA RENAISSANCE SECURITIES
Read more...
COMMENT - This is pretty obvious. Most of GDP is driven by the $10,000 per tonne copper prices. Without heavy taxation, there is no economic diversification which means that when copper prices go down, so does whatever minor spillover effects these historic prices have created. It is a crime.
Zambia’s dependence on foreign markets could reverse gains - LuSE
By Chiwoyu Sinyangwe
Wed 16 Mar. 2011, 04:00 CAT
ZAMBIA’S high dependence on foreign markets for investments and high copper proceeds forms risks that could reverse macroeconomic gains, says the head of LuSE audit committee.Timothy Mushibwe, director and chairman of Lusaka Stock Exchange (LuSE), said the current robust performance of the mining sector, buoyed by record international prices was key in the current strong macroeconomic performance.
Mushibwe told company officials on Monday during the Institute of Directors (IoD) and International Finance Corporation (IFC) sponsored seminar of risk management that copper contributed 81 per cent of the export revenues and 76 per cent of all foreign exchange revenues, a huge source of risk for the country.
“This level of dependenceon one source for revenues is risky to say the least,” Mushibwe said.
“Dependence on foreign markets for investment as well as sale of copper proceeds is also risky. As these days no man is an island and so, equally our governments has put in measures to mitigate these risks by embarking on an economic diversification programme.”
Mushibwe said the current robust performance of the local economy was anchored on high metal prices, supported by good weather and donor inflows, among others.
“Currently, Zambia is enjoying rave reviews about our economy because of a combination of weather, fiscal, monetary and base metals and other factors are all working well together,” Mushibwe said. “The performance of copper prices and production is at all time high. The Treasury is relatively well resourced with increasing revenues from the mining sector, donor support is positive, the weather has been good and we have had two consecutive bumper harvests.”
Mushibwe said the capital market's sole dependence on government as a source of companies to list was risky.
“This focus on one door is fine when the going is good,” said Mushibwe.
“When positions change it becomes very difficult to survive. So, we must find ways to mitigate our risks.”
IoD Zambia president Julu Simuule said risk management was important for every organisation.
Labels: EXPORTS, LUSE
Read more...
COMMENT - Neoliberal economic theory fails again. Inflation is in the single digits, but this has not brought down the cost of money, as bank lending rates are still over 20%. This is obviously a major hurdle for SMEs. Also, the mines use over 50% of power produced by ZESCO, and pay fewer tariffs than ordinary people. Again, this smells of corruption. Foreign owned mines are a net drain on the Zambian economy.
Chilipamushi accuses banks of running cartel
By Kabanda Chulu in Kitwe
Tue 27 July 2010, 04:02 CAT
COPPERBELT University senior lecturer Davidson Chilipamushi has accused commercial banks in the country of operating a cartel hence the failure to reduce lending (interest) rates despite the inflation rate declining to 7.8 per cent.
In a free market economy such as Zambia, the rate of inflation should be able to bring down interest rates to a level equivalent to that of the country’s inflation. For instance,
the rate of inflation is currently at 7.8 per cent and it is expected that interest rates should also be in the range of eight or 10 per cent.
Despite government’s efforts to bring down the rate of inflation to single digit levels, lending rates are still high, the lowest being about 20 per cent offered by some banks.
Government has reduced its borrowing from commercial banks, therefore the yields on treasury bills and bonds have declined thus offering banks alternative ways to make profits such as lending to the private sector and other entrepreneurs.
“This is very surprising that banks have not reacted in the down turn of inflation rates by reducing lending rates, for instance, the rate of inflation is currently at 7.8 per cent and it is envisaged that interest rates should also be in the range of eight or 10 per cent and banks will still make profit but this is not happening, why?” Chilipamushi asked, in an interview last Friday.
“And this is a hindrance to the development of the economy which needs to be addressed and the competition authority should take a keen interest in this matter because there is an apparent tacit collusion if I may say so because it doesn’t make sense that the rates for all banks are high although some have reduced but still remains high and someone was saying that there are many cars in the street since banks are dishing loans but this growth is not tangible since it is not translating into poverty reduction.”
He said the failure by banks to reduce lending rates was stifling development because investment decisions that had to be made by companies and individuals were delayed.
“It is surprising that this is happening, banks and even micro finance institutions are also charging higher rates despite government making efforts to ensure macroeconomic stability, and players are failing to respond, for instance, government is reducing borrowing from the banking sector therefore yields on bonds and treasury bills also come down in line with the desire not to borrow so much from the banks,” Chilipamushi said.
“This situation compels banks to look for alternatives from which they can make money than the easy way of buying bonds and treasury bills and it appears to me that, the alternative still remains lending to the private sector so there must be a balance between alternative investment sources.”
And Chilipamushi said Zesco Limited should stop looking at increasing electricity tariffs as the major source of its capital investments. Chilipamushi said shareholders of Zesco must recognize that the huge problems facing the company require the entity to be restructured to manageable levels.
“It appears the only source of capital investments as of now is through tariffs they charge to consumers out there but what Zesco needs to do is to look for alternative sources of funding to sustain their activities and that is making it saleable or bankable either through restructuring and bringing their books to date by reducing their debts on the balance sheets then people will have confidence. There are several sources of funding including locally at the stock exchange,” Chilipamushi said.
“What Zambians are looking forward to is to ensure that this Zesco is brought into the market and it has to be listed so that you and me can buy interest in it and I don’t know if that is a hindrance in their (Zesco) quest to move forward but they just have to restructure themselves and ensure that they operate on a commercial basis and get on the market and expand capacity to borrow and meet their expenditure requirements.”
He said Zesco does not operate as a commercial entity since it lacked a strategic plan.
“On paper Zesco had undergone commercialization but I don’t believe Zesco is operating as a commercial entity, firstly it has to be restructured and strategize and unbundling is not an issue and the issue is making Zesco viable as a single entity and in the absence of a proper study being done, it is difficult to recommend unbundling,” said Chilipamushi.
Lusaka Stock Exchange (LuSE) general manager Beatrice Nkanza has used every opportunity requesting struggling government entities such as Zesco, Indeni, Tazama, ZSIC and others, to raise part of their capital investment on the stock markets.
Nkanza has explained that due to the strict process of listing, companies could raise funds through bond issuance and other debentures.
Zesco has applied to the Energy Regulation Board (ERB) requesting for 36 per cent electricity tariff adjustment because it requires more than US $850 million to increase power generation capacity.
Zesco also wants to have in place cost reflective tariffs whereby consumers would pay for the power they use but surprisingly the mines that consume over 50 per cent of Zesco’s power production pay less tariffs compared to domestic consumers.
Labels: BANKING, BEATRICE NKANZA, CARTEL, DAVIDSON CHILIPAMUSHI, LENDING RATES, LUSE, ZESCO
Read more...
ZICA urges floating of govt shares in Zamtel
By Chiwoyu Sinyangwe and Fridah Zinyama
Tue 22 June 2010, 04:01 CAT
ZAMTEL managing director Mukela Muyunda has disclosed that all employees will be retrenched as Lap Green Network Telecommunication takes over the country’s biggest telecommunication firm.
And Zambia Institute of Chartered Accountants (ZICA) has called for the floating of government’s 25 per cent shareholding in Zamtel on LuSE for the public to continue having ownership in the company.
Meanwhile, Independent Management Consulting Services (IMCS) Limited management consultant John Kasanga has expressed concern at government’s decision to cede majority shareholding to Lap Green Network of Libya at a cost of US $257 million.
The partial privatisation of Zamtel has raised a lot of debate in the country, with the public questioning the manner in which the whole transaction was handled by the government.
Zamtel’s partial privatisation has raised a lot of questions, following the total disregard to procedure that then former transport and communication minister Dora Siliya had taken to chose RP Capital to value the telecommunication’s company assets.
Other stakeholders have argued that government has sold Zamtel to Lap Green Network Telecommunication for a ‘song’, adding that the telecoms company was undervalued.
According to a circular sent to all employees on June 15, 2010, Muyunda stated that all employees would be paid agreed settlement packages after the retrenchment process.
Muyunda stated that the restructuring and rehiring was expected to start in July 2010 and concluded by the next month.
“…As part of the restructuring, all Zamtel employees will be retrenched and all employees will be paid their agreed settlement and packages in full,” Muyunda stated. “For this purpose, the government has allocated a substantial proportion of the total purchase consideration for the payment of the agreed settlement packages to all employees. An independent audit of these packages is being fully undertaken, and independent auditors will verify that payment is made in full to each employee.”
Muyunda said Lap Green Network Telecommunication would after the retrenchment process hire staff who possessed necessary skills and qualification and experience to contribute to realisation of the objectives of the five-year plan and building of a vibrant and competitive organisation.
“It is expected that the restructuring and rehiring will start in July 2010 and be concluded in August 2010,” stated Muyunda.
“This will be done in such a way that operations will not be adversely affected. This is an extremely important exercise since it presents the company with a unique and rare opportunity to identify the real talent that is much needed to affect the turnaround. More information will be provided on how this extremely important exercise will be conducted ; suffice to say it will guided by objectivity and the need to secure a talented, experienced and hard working employee base.”
And Mulendema said there had not been transparency in the sale of Zamtel and the appointment of RP Capital Partners as valuators of Zamtel’s assets prior to its privatisation.
“This is why government should float its 25 per cent shares in Zamtel Ltd on the Lusaka stock exchange so that the public can continue having ownership through buying of shares in the entity,” he said. “The floating of shares will also enable the Security Exchange Commission (SEC) to regulate how the entity conducts its operations.”
Mulendema however supported the sale of Zamtel’s majority shareholding to a private entity.
“…It is a good thing that Zamtel has been sold because it had accumulated significant tax losses that the company was not paying…What the public must appreciate is that Zamtel has accumulated significant tax losses, in that Zamtel has not been paying any direct taxes to the treasury,” he said. “So this sale means that there will be more effective management and re-investment which will bring about improved services and an increased revenue base.”
Mulendema further added that Zamtel would also be able to pay dividends to its shareholders such as the government which would lead to an increase in shareholders’ wealth.
“The sale of Zamtel is likely to add value to the economy and the Zambian citizenry as a whole,” he said.
Mulendema added that this was exactly what had been happening to Zanaco, which had been making significant tax losses and therefore failing to pay its shareholders.
“After the sale of Zanaco and after putting effective management and control systems in place, Zanaco has contributed about K75 billion in form of direct taxes to the treasury because of an increase in profitability and service delivery to the public,” he said. “The bank has also been able to pay dividends and list on the stock exchange where the public is able to own shares.”
Mulendema added that once listed on the stock exchange, Zamtel would be regulated as a public limited company.
And Kasanga has questioned government’s rushed decision in privatising Zamtel.
“Zamtel’s problems have been there for a long time...why has this government suddenly felt the rush to privatise Zamtel in this manner,” he asked. “The opaqueness in the manner government has carried out the entire transaction is extremely worrying.”
Kasanga said Zamtel’s problems were actually created by government itself in that they were taking long to dismantle the huge debt that had accumulated with the company.
“...that the company had actually managed to survive this long is due to the private sector who have actually been paying their bills to the telecoms company,” he said.
Kasanga wondered why government did not carry out an independent study to determine what was wrong with the company instead of quickly disposing of the 75 per cent shares to Lap Green Network.
“The value at which Zamtel was sold will continue to be a contentious issue,” he said. “Its infrastructure should have been valued as government had been making money from the international gateway.”
Kasanga said government was very short-sighted in its decision to dispose of the Zamtel shares in that manner as they did not consider the fact that telecommunication was one of the fastest growing industry in the world.
“The public equally has issues with the way government disposed of the shares....the percentage sold to Lap Green was too high,” he said. “Am not too sure whether we have gotten a fair price ...”
Kasanga further advised government to listen to the concerns which the public had been raising over the sale of Zamtel.
But President Rupiah Banda has maintained that the partial sale of Zamtel was irreversible because it had been done legally.
President Banda maintained that the sale of Zamtel to Lap Green Network was binding as it had been done within the law and there was no way of reversing the process.
Meanwhile, former University of Zambia (UNZA) Development Studies lecturer Fred Mutesa said government should avail the business plans that Lap Green Network has for Zamtel for the public to have something to hold the investor accountable to if it fails to deliver.
“We would like to know the business plans that the new owners have...and how much money they intend to invest in Zamtel and also how many employees they intend to absorb from the Zambian workforce market,” he said.
Dr Mutesa also said government should not have entrusted majority shareholding to such a strategic company such as Zamtel to an investor.
“Government should have made an effort to try and recapitalise Zamtel as it is still a viable entity, as witnessed by the number of bidders,” he said. “Its lack of profitability was due to government’s inability to pay its bills and the MMD’s tendency to siphon funds to fund its party activities.”
Dr Mutesa, who is also Zambians for Empowerment and Development (ZED) president, said the appointment of cadres to management positions had also affected Zamtel’s operations which had contributed to its non-profitability.
“Government does not seem to understand the spin off effects that can be achieved from a company such as Zamtel,” said Dr Mutesa.
Labels: ITC, LAP GREEN, LUSE, MUKELA MUYUNDA, ZAMTEL, ZICA
Read more...
Bharti moves to buy 20% minority Zain shares listed on LuSE
By Chiwoyu Sinyangwe
Mon 21 June 2010, 12:50 CAT
BHARTI Airtel intends to buy the 20 per cent Zain Zambia Plc shares, a move which might lead to the biggest mobile company de-listing from Lusaka Stock Exchange (LuSE). And Celtel Zambia Pls share has continued to record steady gains amidst some movement, closing trading last Friday at K690 although coming down by K5.
This month, Bharti Airtel which is owned by Indian wealthy business Sunil Bharti Mittal recently completed the US $10.7 billion acquisition of Kuwait-based Zain's African franchise except in Sudan and Morocco.
In a public announcement to shareholders and the Zambian market by the sponsoring broker Pangaea Renaissance, Bharti Airtel intends to acquire the Celtel Zambia Plc shares which trade on the local bourse as Zain Zambia in accordance with the Securities Act.
Pangaea Renaissance stated that Bharti Airtel’s acquisition of Celtel Zambia Plc shares would depend on the minority Zambians selling their shares when the offer comes.
“Bharti intends to make a general offer to acquire the remaining shares of Celtel Zambia Plc which it does not currently own,” Pangaea Renaissance stated. “The effect of the general offer is to give eligible minority shareholders in Zain Zambia the opportunity to sell their shares, wholly, partially, or not to sell any of their shares, at their sole discretion, to Bharti, during the offer period when it is announced…”
Zain Zambia Plc is the country’s biggest mobile phone company with 3 million mobile telephone subscribers and was the only listed unit in all the African operations were Zain Group operated.
And LuSE stated that Celtel Zambia which listed in 2008 in the country’s biggest IPO, valuing the company at US $1.17 billion continue to trade very actively.
LuSE stated that Celtel Zambia share closed trading yesterday at K690 having listed at 640 kwacha two year ago.
“The all share index recorded a decrease of -0.23 per cent to end trading at 2,890.58 points,” LuSE stated on its website. “Celtel was the only security that recorded a price movement, it closed at K690, down by K5. A total of 18 trades were recorded, involving 96,260 shares worth K64.3 million.”
Labels: BHARTI AIRTEL, LUSE, ZAIN ZAMBIA LIMITED PLC
Read more...
Govt to compel mines to list on LuSE
By Mutale Kapekele
Tue 06 Apr. 2010, 04:01 CAT
COMMERCE minister Felix Mutati has revealed that the government is to compel mining companies to list on the Lusaka Stock Exchange (LuSE) to allow Zambians own equity in the country’s main economic stay.
“Mining groups are operating outside the fences of LuSE and it is a failure by GRZ Plc (the government) to compel them, but we shall rectify that failure,” Mutati said in response to LuSE chairperson Friday Njovu who called on the government to compel mining companies to list on the local bourse.
Mutati accepted that it was a failure by the government for mining companies to operate outside LuSE.
Njovu, during the LuSE corporate governance awards last Thursday, observed that listing mining companies would attract more investors to the local capital market.
“This is a mining country and listing by the mining companies will be a boost to the market and make it more attractive to investors,” Njovu said.
“As part of our sustainability strategy, we would like to see mining companies listed on the exchange.”
He said the government must ensure long-term sustainability of companies, listed or not, through incentives that led to growth.
“Growing companies provide the government with a stream of revenues in the longer term and also have a chance of listing for broader participation,” Njovu said.
“When we talk governance, we are talking long-term partnership with the government and other stakeholders who keep the exchange going.”
He said listing companies on LuSE would encourage transparency and accountability in the way business was conducted.
“Being listed is a mark of excellence. It is the willingness to be transparent and responsive to one stakeholder,” he said.
“It is the willingness to adhere to and be compliant with standards way beyond your own and to an authority way above your own. Dealing with a company that has high accountability levels is much simpler.”
Njovu also said the government should ensure that businesses in the country adhered to high standards of corporate governance.
“I would like to remind you (government) that corporate governance is not only for listed companies,” he said.
“It has become the fundamental consideration why a company should exist and how it should be governed. Good governance is a firm foundation that guarantees the survival of the companies. Evidence is abound when governance is ignored or tampered with. We experience market and company failure.”
Njovu said for the health of the economy and the realisation of the government objectives, everybody should be advocates of corporate governance.
Later, Mutati acknowledged that lack of adherence to good governance led to business failure.
“Business failures are due to defects in corporate governance,” Mutati said.
“Accountants and other professionals in business should not just tick the boxes. Emerging markets, like ourselves, should appreciate as a major issue. We need to encourage structure of employing ethical standards compromised by not adhering to corporate governance. Listed companies should take this into account.”
He said companies that worked hard to ensure corporate governance remained active even in events of crisis.
Mutati said the government was encouraging parastatals to secure long-term financing through listing on LuSE.
Mutati said corporate governance made a difference to people whose “biggest threat is poverty, hopelessness that can be addressed by good corporate governance.”
And Zambia Institute of Chartered Accountants (ZICA) president Chintu Mulendema said most companies did not comply with corporate governance.
“Only 13 out of 20 agreed to be evaluated,” said Mulendema who chaired the selection committee for corporate governance awards.
“It is shameful! This is a major concern for LuSE. Evaluation of companies should be mandatory. Listed companies should be compelled to produce annual reports and to provide accounts to shareholders and stakeholders. They should be people-regulated.”
He said some companies did not highlight activities to do with the environment, health and social responsibility.
Mulendema said ZICA would work with the Institute of Directors (IoD) and LuSE to improve business compliance.
Listed companies are required to comply with provisions of the companies Act, securities Act and the banking and financial sector Act.
Labels: FELIX MUTATI, FRIDAY NJOVU, LUSE, MINING
Read more...
SMEs not ready for listing on LuSE, says Nkanza
By Mutale Kapekele
Thu 01 Apr. 2010, 04:00 CAT
LUSAKA Stock Exchange (LuSE) general manager Beatrice Nkanza has said Small and Medium Enterprises (SMEs) are not yet ready to be listed on the stock exchange.
Addressing the press yesterday, Nkanza said SMEs had corporate governance issues that needed to be addressed before they could be considered for listing on the stock exchange.
“SMEs command 90 per cent of commerce in Zambia and without them, we would be leaving a big gap in the business world,” Nkanza said.
“As LuSE, we have for the past two years sensitised them on their responsibility. For them corporate governance is a big challenge. It will be a while before they become eligible. They should first have structures, clear separation of roles for professionalism’s sake. They still have a long way to go to guarantee sustainability.”
She said the biggest challenge SMEs had was keeping financial records.
“They need to put things in place as they grow,” Nkanza said.
“We are hoping to see cluster of financially in order companies so that they can attract investors. SMEs are small in capital, human resources, focus and marketing.
She said the securities Act had been reviewed to embrace SMEs on the stock market and that all that was remaining was for parliament to enact it into law.
And Nkanza has urged companies that are listed on LuSE to observe high standards of corporate governance.
“This is not limited to big companies but all organisations. Listed companies should be responsible to itself and other stakeholders because they have wider ownership,” she said.
She announced that LuSE will today recognise one of the listed companies with a good corporate governance award.
Currently, 20 companies are listed on LuSE.
Labels: BEATRICE NKANZA, LUSE, SMEs
Read more...
Finance Bank, Credit Suisse deal to increase investment capacity
By Kabanda Chulu
Fri 22 Jan. 2010, 04:01 CAT
FINANCE Bank yesterday stated that its partnership with Credit Suisse of Switzerland will enable the bank to increase its capacity in investment banking and structured finance to support its regional banking strategy.
And Finance Bank executive director for corporate banking Noel Nkoma has said the bank will this year list a substantial percentage of shares at the Lusaka Stock Exchange (LuSE).
Commenting on the International Financing Review award given to Credit Suisse, which has a 40 per cent stake in Finance Bank, Nkoma said the development affords the bank an opportunity to support its regional banking strategy of establishing branches in DR Congo and Zimbabwe.
He said the International Financing Review, which was an investment banking magazine, has recognised Credit Suisse as 2009 Bank of the Year, for having successfully come through the most ‘turbulent’ period in recent history for the financial markets’ sector.
“Credit Suisse owns 40 per cent in Finance Bank and this positive development will help us leverage our regional expansion strategy of establishing branches in DR Congo and Zimbabwe and this partnership will enable us increase capacity, both in investment banking and structured finance,” Nkoma said.
According to the International Financing Review, that Credit Suisse has come through the biggest economic downturn in 80 years intact thus enhancing its reputation and business acumen.
“This bank is client focused with capital efficiency strategies and has emerged from the financial crisis with some of the best financial ratios in the industry and with a high return on equity and its decisive actions dealing with illiquid assets,” it stated.
The Bank of the Year award falls on the heels of Credit Suisse after being recognised as the best investment bank by Euromoney in July 2009 and best private bank by Euromoney in January 2010.
And Nkoma said Finance Bank had already decided and would go ahead to list shares at the Lusaka Stock Exchange later this year.
“Listing at LuSE is a priority and will be done this year preferably by June and a substantial percentage of shares will be offloaded though I don’t have exact figures since our financial report is not yet out and shareholders are yet to meet and decide the number of shares to be given out to the public,” said Nkoma.
Labels: BANKING, CREDIT SUISSE, FINANCE BANK, LUSE, NOEL NKOMA
Read more...
COMMENT - I disagree with mrs. Nkunda. People didn't just 'get ahead of themselves' and created hundreds of trillions of dollars in toxic assets - several times global GDP (which I think is 60 trillion dollars). This is about the disastrous effects of neoliberal policies - deregulation, privatisation and corporate free trade. This happened in the 1920s, 1980s, and now it happened again. Neoliberalism has failed again, and we're lucky if the global economy makes it through this time. There is no need to try again.
LuSE to integrate trading sessions into national payment systems
Written by Kabanda Chulu
Friday, May 29, 2009 4:28:41 PM
TRADING sessions at the Lusaka Stock Exchange (LuSE) will this year be integrated into the national payment systems in order to enhance integrity of the capital markets by separating securities from payment systems.
In an interview in Lusaka, LuSE general manager Beatrice Nkanza said there was need to start transacting the way foreign investors did in their own environments when conducting business at the capital markets.
“Things have really been shaken including capital markets and LuSE is affected since we are part of the global network and we have people who are investing in those markets and they are doing that in the so called emerging markets including ours but we will be impacted by the changes going out there like banks, companies going under, markets are affected hence there will be regulatory changes that will impact even on those of us who have been compliant and what those changes will be remains to be seen,” Nkanza said.
“There is nothing wrong with the systems out there but people just got ahead of themselves and ignore rules hence getting into problems so restructuring will enhance and compel players to abide by the rules which we have been doing here and soon the central depository bill will be enacted and what it does is to separate payment and settlement systems thereby enhancing the integrity of markets by separating securities from payment systems. Right now we have just met the Bank of Zambia so that LuSE can be integrated into national payment system so when foreign investors come to do business, they will find that the things they do there we will be doing it here.”
She expressed optimism that confidence would soon return to the capital markets.
“Capital markets are run on confidence. Right now confidence is short because of what is happening everywhere not only at LuSE but throughout the world, as a result people have lost value - companies like General Motors (GM) have gone into turbulent difficult waters, did you ever wonder that GM, one of the biggest companies in the world, can go under, did you ever?” asked Nkanza.
“We want confidence to come back and it should come back since western governments are pumping a lot of money to resuscitate companies and financial systems and stimulate people to start doing business again. Hopefully things will soon return to normal and we hope to strengthen our systems so that we fit in smartly with what is happening globally so that when these funds start moving, they can find way to LuSE and people can get returns and profits like they expect.”
Labels: BEATRICE NKANZA, LUSE, PAYMENT SYSTEMS
Read more...
Finance Bank to list on LuSE next year
Written by Kabanda Chulu
Tuesday, May 12, 2009 3:51:28 PM
FINANCE Bank managing director Dick King has said the bank will list its shares on the Lusaka Stock Exchange (LuSE) by end of 2010.
Recently, some industry and financial experts noted that Finance Bank Zambia was experiencing liquidity difficulties as a result of its partnership with Credit Suisse, which had been highly affected by the global financial crisis, hence suspending the issuance of a pre-listing bond of K200 billion and formal listing of shares on the LuSE.
However, King said plans to list and raise a bond were still in place but it all depended on the aspect of right timing.
“As you are well aware, the world financial markets have imploded behind the ‘toxic debt’ impact to the banks and financial institutions globally and this means that we will have to incur the same costs to raise a bond and run our Initial Public Offer (IPO) but with the risk of not attracting investors to either of these capital raising processes due to their own (prospective investors) balance sheet challenges and the disappearance of the Capital Market players,” King said. “My best interpretation under these challenging circumstances suggests the listing will only take place toward the middle or end of 2010, it really depends on the ‘signals’ we are getting from key advisors and players in this space.”
He said Finance Bank was in regular discussion with all its shareholders, including Credit Suisse, to build views, expectations and the case for the prop- osed bond programme and then the IPO.
“I am pleased to inform you that our plans to list and raise a bond are still in place, it is really just a question of the ‘right timing’ that is at issue and it may well be that we revise the nature and quantum of the bond programme but the intent to list and the use of a convertible note within our bond programme remains our commitment to the Zambian market,” said King.
“Our lead arranger will guide us on how best to accomplish our desire for a dual listing, but we are confident that this will still be the most likely event even given the state of the current market.”
Last year, Credit Suisse acquired 40 per cent shareholding in Finance Bank and plans were underway to issue a pre-listing bond worth K200 billion while the formal listing on LuSE was earmarked for end of 2008, but the global credit crunch forced the bank to suspend the project.
Labels: FINANCE BANK, LUSE
Read more...
Underperformance stocks affects institutional investors
Written by Kabanda Chulu
PIA Registrar Chris Mapipo on Thursday said the underperformance of stocks at the Lusaka Stock Exchange (LuSE) has affected operations of institutional investors who have pumped huge amounts of money at the stock market.
During a media briefing in Lusaka to explain the objectives of the Pensions and Insurance Authority (PIA) in the country, Mapipo said the industry in general had performed well and had been growing on an average of 24 per cent for the past eight years.
"Generally we have been performing well but the economic crisis has not spared any country because of linkages in that some assets especially for the mines are insured abroad hence being exposed," said Mapipo. "Locally we have minimal impact unless for those companies that have re-insured abroad and may experience difficulties if those assets are severely affected but to an extent, we have felt the global economic crisis with the underperformance at LuSE since most institutional investors are our members and their operations have been affected."
The PIA regulates two components of the industry that is, the insurance and the pension sub-sectors. The insurance sub-sector recorded a national turnover of K801 billion in 2008 as compared to K626 billion in 2007.
However, net assets under the national pension category declined from K1.9 trillion in 2007 to K 1.8 trillion last year.
The PIA is a quasi-government institution under the Ministry of Finance and National Planning with a mandate to regulate the conduct of the pensions and insurance industry through prudential supervision in order to protect the interest of pension scheme members and insurance policy holders and to foster the industry’s growth, development and stability.
Labels: CHRIS MAPIPO, GREAT DEPRESSION II, LUSE, PIA
Read more...
LuSE urges SMEs to raise capital
BY NANCY MWAPE
THE Lusaka Stock Exchange (LuSE) say there is still hope for Zambian companies especially the Small and Medium Enterprises (SMEs) to raise funds on the capital market despite the credit crunch.
LuSE general manager, Beatrice Nkanza said this in Lusaka at the first Finance, Banking and Insurance Services (FINBIS) Expo 2009 meeting organised by SS Media.
The Expo is expected to be held at Mulungushi International Conference Centre in Lusaka next month under the theme: Partnership for Wealth Creation and Protection.
Mrs Nkanza said SMEs could raise funds on the capital market through the stock exchange’s third market tier.
She said LuSE was currently sensitising the public on the benefits and how companies could apply for listing on the third tier.
She said the LuSE all Index had dropped from 4,000 points last year to 3,000 points due to the financial crisis that has hit the global economy, Zambia inclusive.
At the same function, SS Media director, Shem Simuyemba, said the objective of the expo was to provide a platform for companies to showcase their products and services to existing and potential clients.
Mr Simuyemba said the expo would be a unique marketing window to showcase the depth and diversity of the Zambian FINBIS sector.
“Zambian public particularly, SMEs do not have a good understanding of the range and diversity of services on offer from customer to the business financial services, leasing to trade finance, microfinance to personal loans, government bonds to stocks markets,” he said.
He said the pension and insurance industry was one of the least understood sectors in the country adding that both businesses and individuals needed to be sensitised to take advantage of many existing products and services to deepen the sector.
“It is by understanding the range, diversity and depth that true partnership for wealth creation and protection can be built, generate increased business and growth for the FINBIS sector,” he said.
Mr Simuyemba said the expo was open to all companies and institutions in the FINBIS sector.
SS Media Group Limited has partnered with LuSE, Bank of Zambia and Pension Insurance Authority to promote the expo scheduled for April 3 to 4, 2009.
Labels: BEATRICE NKANZA, LUSE, MULUNGUSHI INTERNATIONAL CONFERENCE CENTER, SMEs
Read more...
LuSE ready for SMEs
By NANCY MWAPE
LUSAKA Stock Exchange (LuSE) says the third market tier is ready for Small and Medium Enterprises to apply for admittance although listing rules have not been adequately publicised.
The LuSE third tier, is a platform for emerging companies in their growth stages and would operate parallel with the main board.
In an interview, LuSE general manager, Beatrice Nkanza said the Securities and Exchange Commission approved LuSE’s applications for the establishment of the third tier last year.
Mrs Nkanza said LuSE management had drawn up a roadmap to sensitise the public on the third tier.
She said a sensitisation workshop was held in Lusaka with stakeholders and follow up meetings would be held with eligible companies.
She said if a company felt it was ready to list, applications could be submitted to LuSE.
“Most people think the third tier market is targeted at micro and small companies. We are looking at middle and prospective growth companies,” she said.
She said to list on the third tier market; a company must show that it has been operational for a minimum of five years, increased revenue and market shares for three successive years.
She said the purpose for the third tier was to allow for less stringent listing requirements thereby reducing the direct cost and enable firms to raise funds and expand.
Mrs Nkanza said to list on the exchange, a company had to have the asset value of between K250 million and K6 billion.
Other listing requirements include a company having at least 30 shareholders and the public should hold a minimum of 10 per cent equity.
She said it was important that firms had a structure with a board and a chief executive officer.
She said a company must have a designated advisor (broker) who is retained and able to help the firm meet listing and post listing requirements.
Mrs Nkanza said the designated advisors would help companies put their house in order and adhere to corporate governance.
She said the market would facilitate funding of emerging companies to overcome conditions of limited capital.
She said the market would also provide an alternative source of interest free and cheaper long-term capital.
She said a third tier is an organised and transparent system for emerging companies to access capital from public sources.
Labels: LUSE, SMEs
Read more...
LuSE makes progress on creation of alternative exchange market
Written by Nchima Nchito
Wednesday, February 04, 2009 11:07:28 AM
LUSAKA Stock Exchange general manager Beatrice Nkanza yesterday revealed that progress has been made on the establishment of an alternative market on the exchange.
Responding to a press query, Nkanza said deliberations were being held with various stakeholders to find a way forward regarding the establishment of
an alternative exchange for small and medium enterprises (SMEs).
“With respect to this matter, we had our first stakeholder meeting in December where we addressed the member organisations whose members we would be targeting,” she said.
Nkanza revealed that the next stage was to address prospective companies directly with meetings being planned for Kitwe, Livingstone and Chipata.
“The purpose of these meetings is to interact with them and walk through the listing requirements,” said Nkanza
“The only new item on the SME listing requirement is the engagement of the designated advisor. This is really where the difference is from the current listing requirements for other companies not in the SME category.”
Lusaka Stock Exchange (LuSE) in the recent past announced intentions for the establishment of an alternative market for listing of small and medium enterprises to help them find alternative funding to expand their operations. This is in view of the recognition that SMEs had a vital role to play in the growth of the economy.
Labels: BEATRICE NKANZA, LUSE, SMEs
Read more...
LuSE starts automated trading system
By Kabanda Chulu
Monday October 06, 2008 [04:00]
LUSAKA Stock Exchange (LuSE) has today begun conducting the automated trading system on a trial basis that will result in the launch of Alternative Investment Market (AIM) by December 2008.
And last week, the LuSE all-share index declined by 1.25 per cent from 3,639.78 points to 3,594.32 points following losses in most of the stocks at the capital market.
In an interview on Friday, LuSE general manager Beatrice Nkanza said a lot of progress had been made concerning the launch of the parallel market.
“The consultants are on site and automation has started on trial basis with the launching of the system to be done soon and we are hopeful that December this year, we are going to launch the parallel investment market,” said Nkanza.
LuSE has engaged MIT of Sri Lanka to install the automated trading system which is expected to improve efficiency during trading operations.
It is expected that LuSE will take advantage of the many opportunities that automation offers like cross listings and real-time information sharing.
Automation will also enhance the trading system since it will be more visible to investors who will be able to see the bids and offers as they are placed in real time.
And a total of 15,819,649 shares were transacted in 101 trades that yielded a total turnover of K9.05 billion.
But in terms of prices, the market recorded loses in most of the stocks and the all-share index closed at 3,594.32 points having declined by 1.25 per cent compared to 3,639.78 points for the week ending 26 September 2008.
Trading activities were recorded in British American Tobacco, BP Zambia, Cavmont Capital Holdings, Zain, Lafarge, Investrust Bank, Pamodzi Hotel, Standard Chartered Bank and Zambeef Products. Others were Zambian Breweries, Zambia Sugar and Bata.
Labels: ALTERNATIVE INVESTMENT MARKET, LUSE
Read more...
LuSE yet to attract mines
By Maimbolwa Mulikelela
MINING companies operating in Zambia are yet to be attracted to list on the Lusaka Stock Exchange (LuSE) because they are still managing to raise huge amounts of money for their investments through large international capital markets, Chamber of Mines of Zambia (CMZ) president, Nathan Chishimba has said.
Mr Chishimba said some mining companies had dual listings on the global capital markets and that any decision to list on an additional market like LuSE was seriously weighed against such market’s regulatory and compliance environment compared to current listings.
Mr Chishimba said although CMZ would not speak authoritatively on investment decisions and strategies of individual members, there was need to evaluate the resultant additional compliance work required to satisfy multiple exchanges versus the quantum of possible investment funds available in the additional markets.
In response to a Press query, Mr Chishimba said there was need to understand that mining houses in Zambia were not individual investors and that mining investments tended to be large, long-term and highly risky.
He said raising adequate funds for large scale investments required mining companies having to procure financial resources through the larger international capital markets mainly in Australia, United Kingdom, Canada and South Africa.
“For example, if a company needed to raise US$500 million but could only raise US$10 million on LuSE with the same amount of effort to raise US$250 million in London and US$250 million in Toronto, then on that basis alone, an economic justification to list on LuSE would be difficult.
However, if the quantum were only US$10 million it needed to raise, then the playing field would swing heavily towards LuSE for a local development,” explained Mr Chishimba.
He explained that this could be the reason why the market has seen more service and supply companies related to the mining industry list rather than mining companies themselves as their investment capital required is normally substantially less.
However, Mr Chishimba acknowledged that LuSE had in recent months demonstrated admirable growth rates that had attracted a lot of international interest.
The growth would improve the liquidity of the market and enable LuSe to acquire the depth to attract listings by larger players in the economy.
“Importantly, it needs investors whether individual, institutional, local or foreign who are prepared to take risk for better returns.
This is why it is important that the investment climate in the country continues to provide stability, maturity and attractiveness,” he said.
Finance Minister, Ng’andu Magande, observed yesterday that mining firms in Zambia preferred to list on the international capital markets rather than LuSe.
Speaking when he disclosed that the Government will not sell off some of its 87.6 per cent shares in Zambia Consolidated Copper Mines Investment Holdings (ZCCM-IH), Mr Magande wondered why mining companies were not floating some shares, saying it was unfortunate that mining agreements did not have compelling provisions.
“As you may be aware, the mines in Zambia are owned by foreign companies and they have their capital markets where they come from, so perhaps they prefer to float their shares there,” he said.
Labels: CMZ, LUSE, MINING
Read more...
LuSE automated trading to go live
By Chiwoyu Sinyangwe
Saturday September 06, 2008 [04:00]
THE implementation of the automated trading system on the Lusaka Stock Exchange (LuSE) is expected to go live this November, according to MillenniumIT. MillenniumIT is a Malaysian company contracted by LuSE to implement an integrated Central Securities Depository (CSD) along with MillenniumITs automated trading platform, Millennium Exchange.
"Strengthened with this twinning programme, the LuSE is slated to go live on both systems simultaneously in November of this year," MillenniumIT announced.
The company also stated that MillenniumIT would strengthen the LuS with a state-of-the-art fully automated, standardised systems solution for a CSD and an automated trading platform, providing high performance and scalability in a real-time environment and that the key benefits included substantially greater operational efficiency, lower labour costs, reduced error rates and higher transaction
volumes.
Early this year, LuSE announced that it had engaged a Sri Lankan company to install the automated trading system that is expected to improve efficiency during trading operations.
LuSE general manager Beatrice Nkanza said the automated trading project had reached an advanced stage and that LuSE would take advantage of the many opportunities that automation offers like cross listings and real-time information sharing.
"We selected MIT of Sri Lanka through competitive open tender and they are already on site and the process has started and we expect full installation and testing in the next 90 days or so," Nkanza said. "This programme will improve efficiencies of trading especially now that we are getting more listings, to be able to cope with increase numbers of trades."
LuSE, the country's sole bourse trades in equities, collective investment units and government bonds.
Recently, The MillenniumIT's CSD system was implemented at the Botswana Stock Exchange (BSE), turning it into one of Africa's best performing stock exchanges.
In terms of market capitalisation, the BSE is rated the third largest stock exchange in southern Africa.
Labels: LUSE
Read more...
LuSE ranks among Africa's most innovative exchanges
By Kabanda Chulu
Wednesday September 03, 2008 [04:00]
LUSAKA Stock Exchange (LuSE) has been nominated as one of the most innovative African exchanges offering a huge potential and opportunities for investments. The African Investor (Ai), which is the leading international investment research group, announced that LuSE has been shortlisted for the Ai Index series awards to be held at the New York Stock Exchange on September 15, 2008.
Zain, formerly Celtel Zambia, has also been nominated as one of the best African Initial Public Offer (IPO), together with Safaricom of Kenya and others.
The summit would bring together leading investors and capital market specialists to look at current and potential opportunities for investment partnerships between United States-based and international investors with African companies.
The Africa Investor Index Series Awards are the only international Pan-African Awards that recognise institutional investors, stock exchanges, corporate governance, stock brokers and capital market regulators.
Interest in Africa Index Series, which tracks over US$600 billion for market capitalisation for Africa’s top performing 100 companies, continues to grow and is a testament to Africa’s phenomenal economic growth expected to back global trends by accelerating from 6.1 per cent in 2007 to 6.8 per cent in 2008.
In 2007 LuSE was voted the best performing market on the continent in terms of market return.
LuSE posted a return of 97 per cent in US dollar terms for the first half of 2007.
And last week, the Lusaka Stock Exchange recorded a turnover of K12.25 billion from 16,242,005 shares that were transacted in 136 trades.
Due to share price increases in five listed companies, the all share index increased by 0.55 per cent from 3,663.41 points to close at 3,683.56 points.
Labels: LUSE
Read more...
