While you were sleeping our Analysts were relentlessly searching for the top 5 things every Zambian would be speaking about today.
1. Copper on the London Metal Exchange – LME is trading for $6,895/ton having reversed some gains after crossing $7,000/ton last week. Copper call options are fetching $10,200/ton as investors bet high. They see nothing stopping the red metal reverting to all time highs. What does this mean for Zambia? Should tax structures and designs be revised? With the current mine ownership how will the current Zambian benefit?
2. Crude -Oil- is trading for $63/bbl following the corruption crackdown in Saudi Arabia. Saudi Arabia is in the media for inventory levels which some analysts monitoring remote are accusing the Kingdom of not being truthful about its stock levels. The Kwacha has weakened quite a bit to USDZMW9.85. Zambia’s pump price of fuel is dependent on international crude prices and the effect of the Dollar Kwacha Exchange Rate. Oil has depreciated 14% while Kwacha lost 3%, should we expect the Energy Regulation Board – ERB to adjust fuel prices higher?
3. The last Bank of Zambia rate decision meeting for the year is on 23 November. The Monetary Policy Committee – MPC has cut rates 4.5% in total to 11%. Is there room for another rate cut? Treasury bill and bond yields have started to rise. Zambians are awaiting to see the monetary policy stance for the last quarter of the year…
4. Its been 8 quarters of IMF deal negotiations. One very clear fact is that the Zambian package discussion has never reached board room level in Washington because it didn’t meet the threshold. Structural issues such as debt levels continue to stand in the way of successful conclusion of a deal. Investors are weary of the wait, Asset Selloffs have resulted. Zambians are thinking what next? Will Ministry of Finance continue Pershing the deal next year? Do we NEED or WANT an IMF deal? Can Zambia survive without an IMF deal?
5. Everybody is talking about the findings of the Auditor Generals Report for 2016. There have been many other reports in previous years which have been presented with shocking findings but with little consequence management for those found wanting. What is it that the state will do this time that it could not do in the last few years when findings were presented? Is not the arm of the law long enough to single out those found with accountability gaps? How different is the 2016 report findings to those of previous years?
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