Business

Masoud Alikhani, Chairman of BMR in front of the Donated Ambulances for Kabwe and Bwana Mkubwa
Masoud Alikhani, Chairman of BMR in front of the Donated Ambulances for Kabwe and Bwana Mkubwa
Masoud Alikhani, Chairman of BMR in front of the Donated Ambulances for Kabwe and Bwana Mkubwa
File Photo: Masoud Alikhani, Chairman of BMR in front of the Donated Ambulances for Kabwe and Bwana Mkubwa

Berkeley Mineral Resources Plc Chairman, Mr Masoud Alikhani, has step down.

The statement issued on the company website reads:

“The BMR Board of Directors announces that Mr Masoud Alikhani, the Executive Chairman, resigned from the Board on 17 October 2014 for health reasons. Mr Mark Wainwright, a non-executive Director of the Company, has accepted the roles of Acting Chairman and Acting Chief Executive with immediate effect.

“The Company is in advanced discussions with a prospective permanent Chairman and will make a further announcement in this regard as soon as appropriate”.

Mr. Alikhani resignation follows the successful approval from the Zambia Environmental Management Agency  of the Environmental Impact Statement.

Mr. Alikhani was a very generous man who supported local communities around Kabwe mine. In 2012, he donated two ambulances to Kabwe General Hospital. He gave computers, built a wall fence and funded essential supplies to CONTESA, a local orphanage  in Kabwe.

The chairman of CONTESA, Mrs Avon, said of him:

“Masoud has retired from Berkeley Mineral Resources due to ill health. He was doing too much and hope that who ever takes over will continue to do the good work that Masoud did for Zambia. He was very generous to CONTESA and we shall miss him greatly”.

 

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ZCCM-IH-The Lusaka Stock Exchange (LuSE) is celebrating 20 years of its existence since its inception in 1994. The year 2014 is also special in that Zambia celebrates 50 years of her independence on Friday the 24th October, 2014. October is therefore a special month in Zambia as it galvanizes all Zambians to celebrate their political independence. This year Zambia has even more to smile about on the economic front as ZCCM –IH has declared its first dividend ever.

ZCCM-IH is the investments holding company majority owned by the Government of the Republic Zambia (GRZ) and holds minority equity interests in the successor mining companies created after the unbundling and privatization of Zambia Consolidated Copper Mines (ZCCM) in 2000.

ZCCM-IH is a public company listed on the LuSE. Its shares also trade on the Euronext stock exchange in Paris. Under the current shareholding structure, the Government of the Republic of Zambia (GRZ) holds 87.53 % whilst 12.47% is held by minority shareholders.

Following privatization of ZCCM in 2000, ZCCM-IH inherited debt of approximately USD 363 million on its balance sheet. And for the next ten years the company was technically insolvent – and therefore unable to pay any dividends to its shareholders on account of this legacy debt.
In 2013, ZCCM-IH undertook a major internal restructuring exercise to expunge the legacy debt from its balance sheet. This was done via a share rights offer.

Prior to the balance sheet clean up, the share price of ZCCM- IH on the LuSE was K12.50 on 2nd January, 2013.
After the successful rights offer of May 2014 and elimination of the legacy debt from the balance sheet, the price of ZCCM –IH shares on the LuSE has risen significantly and was K40 as at the beginning of October, 2014. This represents a capital gain of 220% over a period of 21 months.

With a clean balance sheet, ZCCM-IH is now in a position to declare and pay dividends to its shareholders based on the dividend revenues it receives from its investee companies and operating subsidiaries. The big news and event is therefore that for the first time ever ZCCM-IH has declared dividend – and at the AGM held on 7th October, 2014, shareholders approved a total dividend of K250 million which is approximately US$40 million .

Prospects for ZCCM-IH
With a market capitalization of US$ 1 billion, ZCCM-IH has reclaimed its rightful place and pole position as the company with the largest market capitalization on the LuSE. This is befitting, as mining is still the largest export earner for Zambia.
Going forward, there are some interesting and exciting developments. In the 2015 Zambia national budget, it has been announced that GRZ intends to scale down its shareholding in ZCCM-IH from 87.53% to 60%. This sell down of 27.53 % shareholding represents approximately US$ 270 million in current value terms. An interesting component of this sell down is that the shares will be sold to Zambian citizens as part of the overall drive to empower the citizenry.

The net effect is that the free float of ZCCM-IH will increase significantly from the current 12.47% to 40%. This ultimately should improve liquidity in the stock and on the LuSE as a whole and in turn unlock value for the benefit of all shareholders.
As Zambians await the release of ZCCM-IH shares as a preferential sale to the citizenry, this is truly a befitting jubilee celebration of 50 years of independence.

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Samsung Electronics has forecast a 60% fall in quarterly operating profit from a year ago because of slowing Galaxy smartphone sales.

The world‘s biggest mobile phones and TV maker said it expects an operating income of 4.1tn won ($3.8bn; £2.5bn) for the three months to September.

That is below analysts’ expectations for earnings of 5.2tn won.

The South Korean company will publish full financial results later this month.

Samsung’s mobile division, its biggest business, has been struggling to maintain its dominance against rivals such as Apple and Chinese smartphone-makers Xiaomi and Lenovo.

Its flagship Galaxy smartphone line has been losing market share to cheaper models that also have large screens and multiple features.

The firm said quarterly sales amounted to 47tn won, which was below analyst estimates for 50.3tn won.

“Smartphone shipments increased marginally amid intense competition,” Samsung said in a statement.

“However, the operating margin declined due to increased marketing expenditure and lowered average selling price.”

The company also said it is “preparing new smartphone line-ups featuring new materials and innovative designs, as well as a series of new mid-to-low end smartphones”.

Samsung shares rose about 1.6% in Seoul despite the weak profit outlook.

Analysis: Rory Cellan-Jones, BBC technology editor

Samsung has been the standout success of the smartphone era – certainly in terms of building market share, with the South Korean firm overtaking Nokia to become the world’s leading phone manufacturer.

It is still holding on to the number one spot, but competition at both the top and budget ends of the market is now exerting an intense pressure on its profits.

Samsung still has around 25% of the market, down from 33% a year ago, but a trio of Chinese firms Lenovo, Huawei and Xiaomi have rapidly grabbed a big slice. It was the whole Galaxy range which propelled Samsung’s profits ever higher and phones like the latest Galaxy Note 4 still get glowing reviews.

But it hasn’t managed to pull off the same trick as Apple, which continues to charge luxury prices and make chunky profits on its new phones.

The recent launch of the iPhone 6 and 6 Plus is a case in point – analysts say Apple’s profit margins have come down but are still above 40%.

Samsung is struggling to keep prices up at the high end, and with smartphones now becoming a commodity product it’s failing to match its Chinese rivals’ prices for similar phones. The competition is only going to get more intense – and it isn’t clear how the Korean giant can respond.

Samsung announced on Monday that it would spend about $15bn on a new semiconductor plant in South Korea, to meet the growing demand for memory chips.

It is set to be the biggest single investment in a chip factory, and construction will begin in the first half of next year with operations due to start in 2017.

Samsung is a major chip supplier to other electronics firms, including major rival Apple.

Samsung is also facing some pressure at its consumer electronics division, which makes televisions, air conditioners and other appliances.

Sales and overall profit are forecast to have dropped because currency fluctuations made Japanese-made rival products cheaper to buy.

The Korean won strengthened about 3.5% against the Japanese yen in the third quarter.

Source: (BBC NEWS)

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In his first interview since leaving the bond fund Pimco, former boss Bill Gross has said he is ‘uniquely exuberant’ at leaving management responsibilities behind in his new job.

Speaking to Barron’s, he said he had “always been an investment guy” and the “hiring, paying people, planning and so on” became a problem for him.

Mr Gross told the financial magazine that “managing money is in my blood”.

The co-founder of Pimco left abruptly last week to join rival Janus Capital.

It has been reported that he was at odds with the executive committee of Pimco, the world’s largest bond fund, which is owned by the German insurer Allianz.

In his interview, Mr Gross says he’s grateful to Janus’s chief executive for “putting this [job opportunity] together so quickly, in a matter of 24 to 48 hours at most, and I don’t intend to disappoint”.

While at Pimco, Mr Gross was seen as a key figure, and since his departure investors have withdrawn record amounts of money.

‘Obsessed’

The Total Return bond fund, which was managed by Mr Gross, lost more than 10% of its assets in September.

“I like to get up at 5:30 in the morning and make money for clients and compete against other money managers. That’s something that doesn’t go away.

“I am obsessed with delivering value to investors and winning the game from a personal standpoint. Retiring at this point in my career just doesn’t suit me,” he states in the Barron’s interview.

He has been given control of a much smaller fund at Janus, worth $13 million (£8m), in which he says it will be easier to implement ideas than in the $200bn (£125bn) portfolio he used to run.

“The bond paparazzi will be less interested in Janus than they were in Total Return,” he says.

Asked where he sees bond investment opportunities at the moment, he points to Mexico, saying it is “a pretty safe emerging market,” with half the debt level of the US and interest rates around 6%.

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Fitch Ratings has revised its outlook on Zambia’s Long-term ratings to positive from stable and affirmed the ‘B’ rating.

In a statement, Fitch said the revision of the outlook on Zambia reflects the fact that the outlook for Zambia’s public finances is more positive compared with October 2013, when it downgraded the Long-term outlook to ‘B’.

It says the risk remains that the government will overrun the deficit in 2014, due to the better than expected maize harvest and consequent spending pressure from the Food Reserve Agency, higher wages, as well as the payment of VAT refunds.

Fitch has since forecast a deficit of 5.8% of GDP and an improved fiscal outlook as well as strong GDP growth to contain the debt burden.
Fitch expects consolidated general government debt to peak at 33% of GDP in 2016, well below ‘B’ peers.

It observed that the policy environment has improved, following the uncertainty initially created after the election of President Michael Sata.
“Early pronouncements from the new administration led Fitch to revise the Outlook to Negative in February 2012. However, the decision to revoke regulations that were adversely impacting the foreign exchange market is credit supportive. Although risks persist, particularly ahead of the elections, the business environment has not deteriorated as much as previously expected and the likelihood of significant and adverse policy shifts has significantly reduced.”

“The fiscal outturn for 2013 which was 5.7% of GDP or 6.6% prior to GDP rebasing came out significantly below the budget figure of 8.6% of GDP announced in August 2013. Furthermore, fiscal data for the first six months of 2014 suggest that the deficit was well contained at 2% of GDP which was against a target of 2.5% of GDP,” the statement said.

Fitch says although this partly reflects higher-than-expected VAT receipts due to the build-up in VAT refund arrears making up 2.5% of GDP to exporters, it acknowledges the commitment to expenditure restraint over the first half of 2014.

It added, “The authorities’ decision to approach the IMF, combined with the latest medium-term expenditure framework, which shows the budget deficit falling to 3.2% of GDP by 2017, suggests renewed commitment to fiscal prudence by the government. However, possible pre-election spending ahead of the 2016 presidential contest, failure to agree on an IMF programme as well as the repayment of VAT arrears to mining companies once a final agreement is reached, all add to fiscal risks.”

It added, “Inflation remains above the Bank of Zambia’s 6.5% year-end inflation target. The current account is expected to remain in surplus over the medium term, supported by rising copper production and broadly stable copper prices. Foreign companies’ repatriation of profits abroad is more than offset by strong inflows of FDI.”

“The recent Eurobond issue has boosted reserves above three months of current external payments. The decision to revoke exchange rate regulations as well as the announcement that the government intends to approach the IMF has seen the local currency appreciate 12.9% since May, after a sharp sell-off in the first half of 2014. Nevertheless, the kwacha remains sensitive to external shocks from capital flows or copper prices.”

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EPL - Kabwe Mine Site
Ministry of Commerce, Trade and Industry Permanent Secretary Siazongo Siakalenge has disclosed that Zambia will be the world’s second largest steel producer by 2030.

Speaking to journalists shortly after a conducted tour of Kafue Steel Plant in Kafue District today, Mr. Siakalenge says Zambia is expected to be exporting six billion tons of steel per year starting from 2030.

Mr. Siakalenge explains that Kafue Steel Plant has engaged the Zambia Bureau of Standards (ZABS) to be certifying the standards of the steel produced by the company in order to meet the required standards.

He says government has worked so hard to ensure that Kafue Steel Plant and Good Time Steel in Lusaka penetrate the COMESA region which he says is a plus on the part of government.

Speaking in a separate interview with journalists, Finance Minister Alexander Chikwanda says it is unfortunate that the country is still importing steel when there are companies which are producing quality steel products.

And Kafue District Commissioner Grace Ngulube expressed concern that Kafue Steel has been failing to address pollution and the safety for workers.

Meanwhile, Kafue Steel Plant Director Dr. Bright Chunga has refuted claims of pollution stating that the company uses electricity for production which does not produce smoke.

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ZAMTEL
ZAMTEL
ZAMTEL
ZAMTEL

ZAMTEL and NEC Corporation, a global telecommunications equipment manufacturer have agreed to build a new digital microwave radio transmission network at a cost of over US$18.3 million.
The investment in mobile service provider’s transmission infrastructure aims to modernise the company’s digital microwave transmission backbone network to meet current and foreseeable future growth in mobile data demand, while supporting the company’s Long-Term Evolution rollout plan.
Zamtel chief Executive Officer, Mupanga Mwanakatwe said the pact will help boost mobile coverage and capacity for citizens, enterprises and tourists across the country.
“This partnership will see NEC design, manufacture, supply, deliver, install, test, migrate and commission a native Ethernet microwave backbone and access radios specifically tailored to Zamtel’s requirements,” Dr Mwanakatwe said.
“The deal, which includes the supply, delivery, installation, testing and commissioning of NEC’s microwave transmission network equipment, is expected to be completed within 12 months and will cost US$18,329,326,” Dr Mwankatwe said at a joint press briefing in Lusaka yesterday.
He said NEC will upgrade Zamtel’s existing backbone and access systems and commission new links to connect its base stations and core network wirelessly.
Dr Mwanakatwe said the new digital microwave backbone and access project will include the installation of 2Gbps, 600Mbps, 300Mbps and 150Mbps backbone and access networks based on native Ethernet microwave radio network technologies.
He said on completion, the investment will lead to the realisation of a state-of-the-art national IP microwave backbone and access network.
Speaking at the same event, NEC corporation president Nobuhiro Endo said NEC’s highly reliable and cost-effective solution will enable Zamtel to support continued economic growth and underpin emerging services, such as mobile money and high definition mobile TV, in both rural and urban locations.
“By boosting the coverage and capacity of its wireless backhaul network, Zamtel will be able to meet the ever rising demand for mobile broadband services,” Dr Endo said. Source: Zambia Daily Mail

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Chris Yaluma
Chris Yaluma
Chris Yaluma

MINES minister Christopher Yaluma says Vedanta Resources Plc is showing firm commitment and goodwill owing to KCM’s improved operational performance.
Last February, Vedanta, Konkola Copper Mines’ parent company, made several commitments in a Business Improvement Plan (BIP) to revitalise operations.
The BIP was committed in writing to help KCM raise fresh liquidity to the extent of US$250 million for meeting operational requirements and settling out overdue creditors.
Last June, Yaluma said Vedanta had already settled about US$100 million at the time of their meeting in February, and that the firm was bound to report on performance benchmarks on a quarterly basis to ensure it fulfills its commitments and turn around its fortunes.
But Yaluma said judging from what had been achieved so far, he was convinced that KCM was showing goodwill and commitment against their BIP.
“I recently sent technocrats back to the mine to verify a few things from the operations point of view. Their production has been rising and they are going in the right direction. This is not being portrayed, it is something I have seen,” Yaluma said in an interview in Lusaka.
He said job security for workers at the firm had also improved with some having been upgraded from temporary to permanent status.
“We have also told them never to retrench any of the employees, and to our satisfaction, they went ahead and converted 250 out of 280 temporary employees to permanent [status] so 30 are outstanding and I am looking forward to see if they have converted the remaining 30 when I meet them next time; so there is commitment and goodwill,” Yaluma said.
He also said KCM had made progress in paying off local contractors, which were among some of its liabilities.
“On paying off the outstanding debt to local contractors, they have paid US$62 million up to our last meeting, and I think by now, they must have offset the other amount,” he said.
Meanwhile, Yaluma, who last week attended the ‘African Down-under’ mining conference in Perth, Western Australia, said an agreement had been reached between the two countries for knowledge and skills transfer to improve mining safety standards in the country.
“The premier of Western Australia [Colin Barnett] has offered to allow skilled people who have worked in the mines to be seconded to Zambia and transfer their expertise to Zambians, mostly those working in the mining and safety department, which is something we are lacking,” said Yaluma.

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50 ngwee
50 ngwee
50 ngwee

NDOLA residents have started collecting 50 ngwee coins that were made in 2013 and re-selling them in Nakonde for K200 each.
Over 20 people visited The Post Newspaper Ndola offices today asking for change for 50 ngwees only.
A resident, Paul Kaulu who had come to place an advert and demanded change for 50 ngwee coins only , said he wanted the change because he wanted to re-sell them to Nakonde.
“A lot people in Ndola especially in Masala are collecting the 50 ngwees and we are specifically looking for the 50 ngwees made in 2013 because they were made from pure gold and when we re-sell them in Nakonde, we are selling each at K200,” he said.
And a check in Ndola town center confirmed that street vendors were collecting the 50 ngwee made in 2013 so that they could re-sell them in Nakonde.
But Bank of Zambia assistant director communication Kanguya Mayondi said the 50 ngwee coins had no property of gold or any other valuables that would warrant people buying and re-selling the coin.
“The 50 ngwee is made of steel blank and is electro plated with bronze. It has no property of gold or any other valuables that would warrant people buying and reselling the coin,” he said.
Mayondi said reselling or melting the 50 ngwee coins was a criminal offence and warned Ndola residents to desist from the act.

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THE Lusaka Stock Exchange says it is anticipating the availability of a designated advisor in readiness for the Alternative Investment Market by November.

Plans for an AIM set to be online in the fourth quarter of this year have been developed by the Securities and Exchange Commission and Lusaka Stock Exchange to provide cheaper capital for small and medium scale enterprises (SMEs) than commercial banks.

National road-shows to sensitise all interested SMEs and the general public on the benefits of listing on the AIM have since been concluded, with the AIM scheduled to come on-stream by December.

But LuSE chief executive officer, Brian Tembo said a designated advisor, who is part of the support structure to assist investors on the AIM, was expected to be fully trained in anticipation of a listed entity on the alternative tier in December.

“When you list on the AIM to make things cheaper for you, there is someone  you have to appoint who will basically ‘hold your hand through your entire life as a listed company. What we are doing is basically training of trainers when training the next designated advisor, so we are hopefully looking at having this sometime in September or November this year,  he said in an interview in Lusaka on Monday.

Tembo said the training of the designated advisor would involve high-level personnel from the Johannesburg Stock Exchange.

“We are bringing in resource people from the Johannesburg Stock Exchange AIM, so we are just synchronising schedules so that when they come, we can have that training, he said.
And on the feedback of companies that expressed an interest to list on the AIM so far, Tembo said the response was encouraging having registered between five to 10 entities that had shown real intent to list.

“We are looking at five to 10 that have shown intent so from that list we are likely to have a number that is actually market-ready. Intention to come to market is different to actually applying, but our aim is to list this tier with one or two companies, he said.
Tembo further said companies that had so far registered interest ranged from the financial services, manufacturing, transportation and the information communication technologies sectors.