STOCKS
Educating companies and the public on the benefits of listing and investing is essential to stimulating activity in the capital markets.
How has the LuSE performed over the last year?
Priscilla Sampa Over the better part of 2016 market activity was characterized by less than favorable trading patterns, induced largely as a result of pre-election political uncertainty and a weakening kwacha. However, the market demonstrated resilience toward the close of the year owing to the strengthening of macro-economic factors. In addition, the Ministry of Finance made significant policy changes that will encourage an influx of FDIs that will boost the market's performance. Furthermore, there is a governmental drive to encourage SME growth through credit reforms that will allow smaller enterprises to forge partnerships or joint ventures with larger, international companies, and this is anticipated to provide additional impetus to the market's performance. The initiative will certainly build capacity and inject capital into the exchange.
What was the motivation behind the establishment of the SEC?
Phillip K. Chitalu The SEC was set up in 1994, prior to the establishment of the LuSE. We were formed by an act of parliament, making us a statutory body. In 1991, after the liberalization of the economy, the government wanted to pull out from several Zambian companies and needed an avenue through which to divest these entities. The stock exchange was the obvious platform for this, but there was the need for the kind of facility that would have regulatory oversight, hence the creation of the SEC. When the government finished selling off most of these entities, the financial landscape in the country changed, becoming much more private-sector oriented. Our current role still involves a great deal of liaising with private entities, engaging them in alternative ways to raise finance.
How can innovation in Zambia be encouraged?
PS Innovation is more easily expressed when the availability of financing to support research and development as well as new technologies is not restricted. While I am confident that we will see increased innovation in Zambia, the lack of access to finance that start-ups encounter must first be overcome. The LuSE offers a clear solution in this regard, and has witnessed increased enquiries from companies about the requirements of listing on the exchange. We, therefore, educate companies on how to draw up business plans and the different products available on the exchange. As a market, we hope to be able to provide the capital new ventures need to expand their businesses.
PKC There is a strong belief that we could be selling the wrong products, products that are not targeted at our market and that have kept levels of participation low. As a securities regulator, we should be wary of the capital environment with which we are dealing: In Kenya, for example, mobile solutions flew off the shelves because the market was extremely receptive to this type of finance model. However, in a credit-type environment, cash-dependent products are likely to flop. Looking back historically, offices such as ours were set up, and set up well, by institutions like the World Bank and its IFC; however, in the process we were issued a standard security product and not one that was accurately tailored to our business environs.
What are your upcoming priorities?
PS First, we plan to broaden the options available to companies that want to trade on the LuSE. We want to grow brokerage and investment bank presence across all of Zambia's provinces, and already engage with banks to increase trading activity and product offering. We also look to introduce several additional instruments to offer on the market, such as deposit receipts, exchange traded funds, and special securities to add to the usual portfolio of equity or bonds. We have entered into discussions with the government about making available certain instruments that could help more SMEs get listed once they are capitalized. We have also run a successful radio program in partnership with certain listed companies, as well as a TV program that explains the basic principles behind investing, and several forums on SME development to better inform people about the differences between money and capital markets.
PKC The SEC is implementing a strategic plan that runs from 2015 to 2018. With this, we have set goals to ensure that people are geared to invest in the market and that their investments are properly protected. Our outreach objectives include radio and other media campaigns to educate people about the safety and benefits of investing. It is possible that without disseminating that type of information, schemes will not take root and people will lose out. This is a key strategic objective to ensure a transparent market that people can trust, which will ultimately lead to growth.
STOCKS
TABLE OF CONTENTS
Year In Review
What A Year
Zambia has long been a bastion of stability in Southern Africa, and while its economy has been rocked in recent years by the falling value of copper prices, a devaluating kwacha, and high inflation, through the Economic Recovery Program the government has bold ambitions to right the ship.
read articleReview
Convoke, Confound & Collect
Squeezed between a rock and a rather hard place by the slowdown in Chinese demand for copper, by far Zambia's biggest export and government-revenue generator, President Lungu has been forced to get creative in his country's alliances to broaden revenue streams and lessen its dependence on the vagaries of one foreign market.
read articleGuest Speaker
Dr. Stergomena L. Tax, Executive Secretary, Southern African Development Community (SADC)
TBY talks to Dr. Stergomena L. Tax, Executive Secretary of the Southern African Development Community (SADC), on regional economic development, boosting pan-continental free trade agreements, and improving security through mutual development.
read articleInterview
Susan Sikaneta, Ambassador, Zambia to Ethiopia & Permanent Representative to the African Union and Economic Commission for Africa
TBY talks to Susan Sikaneta, Ambassador of Zambia to Ethiopia & Permanent Representative to the African Union and Economic Commission for Africa, on championing peace across the continent, advancing women's rights, and promoting Pan-Africanism.
read articleInterview
Sebastian C. Kopulande, CEO, Zambian International Trade & Investment Centre (ZITIC)
TBY talks to Sebastian C. Kopulande, CEO of Zambian International Trade & Investment Centre (ZITIC), on taming austerity, stimulating sustainable growth, and creating the framework to support entrepreneurship
read articleFocus: Zambia Plus
Adding it All Up
On October 20, 2016, at the 2017 Budget Address, Finance Minister Felix Mutati launched the government's economic recovery program, christened "Zambia Plus." The program is designed to spur domestic productivity, through strengthening ties and collaborating with external donors and developers.
read articleReview: Banking
Macroeconomics Rule the Roost
In its ongoing efforts to diversify away from one principal commodity, copper, the government fosters the development, standardization, and efficacy of the private sector. In doing so the systematic support of the financial universe, especially banks, is vital, as is the goal of financial inclusion.
read articleFocus: SME Growth
IMF support program
An IMF support program stands to provide Zambia with some much-needed discipline on its expenditure and operational efficiencies; however, many caution the need for Zambia to determine what it wants to achieve and how the program will benefit the country.
read articleInterview
Christabel M. Banda, Executive Director, Insurers Association of Zambia (IAZ)
TBY talks to Christabel M. Banda, Executive Director of Insurers Association of Zambia (IAZ), on the evolution of the local insurance landscape, raising awareness, and tackling challenges in the sector.
read articleFocus: Solar
Sunny Side Up
As power demand continues to rise and power production continues to fall behind, it's the same old story for Zambia, still wrestling with an ongoing energy crisis. Public- and private-sector drives are seeking to mitigate this deficit by activating the country's solar industry.
read articleInterview
Margaret K. Chalwe-Mudenda, Director General, Zambia Information and Communications Technology Authority (ZICTA)
TBY talks to Margaret K. Chalwe-Mudenda, Director General of Zambia Information and Communications Technology Authority (ZICTA), on new projects, the ZNDC, and expectations for the year ahead.
read articleInterview
Hon. Dora Siliya, Minister, Agriculture
TBY talks to Hon. Dora Siliya, Minister of Agriculture, on the investments being made in agriculture to enable agricultural households, diversifying Zambia's basket of produce, and making international markets more accessible for local producers.
read articleInterview
Hon. Charles R. Banda, Minister, Tourism and Arts
TBY talks to Hon. Charles R. Banda, Minister of Tourism and Arts, on the wealth of tourism destinations within Zambia, efforts to bring more visitors to the country, and what the Tourism Development Fund will contribute to developments.
read article