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Sunday, November 29, 2020

Kwacha lists at Johannesburg Stock Exchange

Economy Kwacha lists at Johannesburg Stock Exchange

kwacha

The Zambian Kwacha has broken new ground after it was listed on the Johannesburg Stock Exchange (JSE) on Friday as one of the three African currencies in which investors, as well as importers and exporters will now be able to protect themselves against currency fluctuations in the three countries.
The listing of the Kwacha, together with the Kenyan Shilling and the Nigerian Naira, was launched at a ceremony held at the JSE in Johannesburg.

The JSE officially started trading in the three currencies at 09.00 am immediately after representatives from the three countries took part in celebrating the trade opening bell.

This development means that market participants wherever they may be around the world are guaranteed a future price for a specific commodity.

Zambia’s Deputy High Commissioner to South Africa, Joe Kaunda who represented Zambia at trade opening bell occasion, has described the launch as a momentous occasion especially that it was happening barely three weeks before Zambia celebrates her Independence Golden Jubilee.

Mr. Kaunda says the development is a milestone and confirmed the confidence that the international markets had in Zambia’s economy and its leadership.

And JSE General Manager for Capital Markets, Warren Geers says the day has marked a ground-breaking initiative in that the JSE had finally managed to launch the African currency listing after having worked on the idea for two years.

Lusaka Stock Exchange (LuSE) Chief Executive Officer, Mr. Brian Tembo, who was also in attendance, hailed JSE for the initiative and disclosed that LuSE that LuSE Is working on introducing such measures through collaboration with the South African stock exchange.

Meanwhile Barclays Bank vice-president for Sub-Saharan African Trading, Lourens Harmse notes that the economic growth rates for Zambia, Kenya and Nigeria were among the highest in the world and signs were that the trend would continue for years to come as investment into Africa continued.

Head for Tradition Futures, Mr. Andrew Gillespie said it was a ground-breaking development to have a transparent, independent and well-regulated platform from which to mitigate or assume foreign exchange risk in the three African countries.

The JSE had partnered with Barclays Africa and specialist brokers, Tradition Futures, in working on this initiative.

This is contained in statement released to Qfm News Press Secretary at the Zambia mission in South Africa Nicky Shabolyo.

45 COMMENTS

  1. This is cool & I suppose HH will counter it saying he will introduce IISE (Ing’ombe Illede Stock Exchange) for barter system of chibwantu & mabisi once voted in power.

  2. Ths is the GREATEST NEWS to ve happened in Zambia.
    Brian Tembo is A VERY hard WORKING YOUNG MAN I ve been worshiped with him at Lusaka Central SDA Church.
    We need such intelligentias. I am so happy for this.

    • BA ANDERSON CHISALA, WHO ARE YOU TO BE WORSHIPED NO MUNENU? IS THIS ANOTHER KUMULU NI LESA PANSHI NI NIBA SHIPANJI? OR IS IT ICISUNGU CENU TACHASHIKA, FYE?

    • This is a great move for the smart people of the Zambian Enterprise due to many reasons. Currency trading “Forex” is the world’s largest market, with about 3.2 trillion US dollars in daily volume and 24-hour market action.

      Exchange rates fluctuate based on economic factors like inflation, industrial production and geopolitical events. These factors will influence whether one buys or sells a currency pair.

      In our case, the eyes of market makers are now focused on these and many other factors, already our current reduction in annual inflation, our GDP output with a constant annualized growth as well industrial production make our currency very attractive.

    • The downside to this would be that speculators in the market can easily drive our ZMK into tighter and inelastic trends. For instance, currently our ZMK is stronger that ZAR and speculators can force the ZMK to rally against the ZAR on pure speculation for profit reasons.

      Once the equilibrium is broken, ZAR may bounce back against a strong ZMK driving real liquidity to lower margins. When that happens, artificial exchange rates may be experienced until a correction occurs. In most instances, such a correction can only happen once the Central Bank intervenes.

      I am not sure if Bank of Zambia currently has the capacity to intervenes correctly to force the market to self-correct. Otherwise, our ZMK has just become one of the first reserve currencies in Africa.

      I like what I see …

    • Chisala, it does not matter who you worship with. I am an Adventist and I don’t follow a human when it comes to spiritual issues. We are all bound to fall. Jesus alone is my model and I struggle to reach perfection. I fall and stand nearly everyday, we are sinners. I am not saying that we can not admire others, my point is that let the life of Christ be our OBJECTIVE LESSON

    • Anderson you have a low self esteem ,no wonder you insult all the time. you” worshiped your friend”, is that necessary to mention pabantu? SDA you are un covered #tribe.
      No wonder you are never objective in your comments.

  3. ANY ONE TO EDUCATE ME ON THIS ONE PLEASE.I DON’T WANT TO COMMENT WHETHER THIS IS GOOD OR BAD UNTIL SOMEONE EDUCATES ME ON WHAT THIS MEANS!!
    AM WAITING……..

    • Ba Neba:

      This is a great move for the smart people of the Zambian Enterprise for many reasons. Currency trading “Forex” is the world’s largest market, with about 3.2 trillion US dollars in daily volume and 24-hour market action.

      Exchange rates fluctuate based on economic factors like inflation, industrial production and geopolitical events. These factors will influence whether one buys or sells a currency pair.

      In our case, the eyes of market makers are now focused on these and many other factors, already our current reduction in annual inflation, our GDP output with a constant annualized growth as well industrial production make our currency very attractive.

      I will soon start adding ZMK into my investment hedging strategies and portfolio … I like what I see.

  4. This is bad for our currency and the country because it means the plasticity of our currency is malleable hence affecting the forex controls. Foreign direct investment will reduce by more 80% because kwacha has no value against the US dollar. The result will be No money in people’s pockets.

    • Even my 82 year old mother is a better economist. This means the country is doing fundamentally right on most things despite the hiccups. For your own information, any time you get listed on a foreign market, that shows you are doing good.

    • Ignorance is bliss … to the total contrary, baba Economist. Which school of Economics did you attend? I want to make sure none of my people goes to it, it is a total waste of scarce resources and much more brain power … thanks a trillion.

  5. Its a good thing to happen It means the Kwacha as a mark of accomplishment is moving like the Chinese are doing to their RMB as an acceptable “reserve currency” quoted and followed by world acknowledged stock exchange like the JSE and receiving Coverage helping also to make our trades on luse and other alternative markets attractive with increased efficiency and reduced costs in settlement as the Dollar or Rand may not be the only currency of settlement but Kwacha thereby reducing the costs of arbitrage and carry trades commonly available with non listed and quoted currencies

    its a good agenda that the RMB Chinese are trying also to promote.

    Its a plus for Zambia and JSE

  6. The JSE has listed a futures contract, a derivatives which derives its value from the Rand/Kwacha exchange rate. A similar contract exists in Zambia listed on the Bond and Derivatives Exchange, a Zambian SEC licensed exchange.
    Facts
    South African Companies in South Africa and Zambia will hedge their currency risk in Kwacha in South Africa.
    Liquidity (more money in circulation) will be in South Africa.
    Skills will develop in South Africa.
    Beneficiation will be in South Africa.
    Capital Markets development in South Africa.
    Disappointing to see Zambian officials cheerleading for South Africa, not sure they appreciate implications.

  7. This is a great move for the smart people of the Zambian Enterprise due to the following reasons. Currency trading “Forex” is the world’s largest market, with about 3.2 trillion US dollars in daily volume and 24-hour market action.

    Exchange rates fluctuate based on economic factors like inflation, industrial production and geopolitical events. These factors will influence whether you buy or sell a currency pair.

    In our case the eyes of market makers are now focused on these and many other factors, already our current reduction in annual inflation, our GDP output with a constant annualized growth as well industrial production make our currency very attractive.

  8. The downside to this would be that speculators in the market can easily drive our ZMK into tighter and inelastic manners. For instance, currently our ZMK is stronger that ZAR and speculators can force the ZMK to rally against the ZAR on pure speculating for profit purposes.

    Once the equilibrium is broken, ZAR may bounce back against a strong ZMK driving real liquidity to lower margins. When that happens, artificial exchange rates may be experienced until a correction occurs. In most instances, such a correction can only happen once the Central Bank intervenes.

    I am not sure if Bank of Zambia has the capability to intervenes correctly to force the market to self-correct. Otherwise, our ZMK has just become one of the first reserve currencies in Africa.

    I like what I see …

    • Ba Opium:

      You are way too much for me … kuti waibala bwanji? Vija vintu va chabe chabe are part of the sensational ceremonies affiliated with the human enterprise in celebratory achievements. Kuti walaba ifya kutumpa?

      You cranked me up … thanks a trillion for making me laugh! But on a serious note, there is serious consideration that needs immediate undertaking by Bank of Zambia. Ever heard of George Soros?

      He is the 27th richest person in the world, the world’s richest hedge-fund manager, and number 7 on Forbes US 400 wealthiest Americans, with a net worth estimated at $23 billion.

      He is known as “The Man Who Broke the Bank of England” because of his short sale of US$10 billion worth of GBP, giving him a profit of $1 billion during the 1992 Black Wednesday UK currency…

    • Continued …. Black Wednesday UK currency crisis was the day Bank of England was brought to its knees all because of one powerful currency speculator. He made $1 billion in profit on September 12, 1992 because the Chancellor of the Exchequer was caught sleeping on the job.

      The Chancellor of the Exchequer for the UK is the equivalence of our Bank of Zambia Governor and the first step should be for the Governor to open a new department at BoZ that should bring in experts from Bank of England to help the Zambian team learn mitigation tactics to avoid losses on behalf of the smart people of the Zambian Enterprise.

      This needs to happen soon as part of capacity building at BoZ to help make this good thing last and yield the necessary dividends we deserve.

    • Now the upside … having talked about the George Soros $1 billion day profit all because the Chancellor of the Exchequer sleeping on the wheel, what if he wasn’t? And that’s the upside for the smart taxpayers of the Zambian Enterprise.

      If the Chancellor of the Exchequer or the UK government had maintained $24 billion foreign currency reserves and the GBP had fallen by the same amount, they would have made a £2.4 billion profit on GBP’s devaluation.

      Another way to win instead of George Soros, would have worked out if the UK government either immediately raised interest rates to levels comparable to those of other European Exchange Rate Mechanism countries or to float its currency.

      Bank of Zambia can now start making huge profits by playing smart … I like what I see

    • One other thing … our Treasury Bills (TBs) are now even more attractive than before since our currency has been made one of the first three reserve currencies in Africa. I can foresee China investing more in our TBs at a more accelerated trend.

      And since the Chinese are building their first Bank of China branch office outside China among the smart people of the Zambian Enterprise and the United States is beginning to fund more projects in Zambia using their Millennium Fund under the UN Millennium Development Goals (MDGs) new competition between two of the world’s largest economies will soon make Lusaka the new financial capital for Africa.

      The government needs to take advantage of the needful and lead in making the Zambian Enterprise the new girl on the block.

  9. @Peter 1.1 and @ Jayd 1.4.
    I dont worship created beings BUT I worship the creator.
    I was just trying to strees my point nothing else.
    Enjoy the week guys….!!! Only hoping for the BEST for mother Zambia….!!

  10. I hope that wide consultations were made with BoZ and MoF and consent obtained. Ultimately they are the guys who bear ultimate responsobility for our kwacha, and not Barclays Bank Africa or JSE or even LuSE these are just interested in profits, or making a name as someone has suggested on this blog. The memories of some SIs and their impact on the kwacha before someone remembered to revoke them are too fresh ignore. So let’s reflect on this before we get excited.

  11. Its a good think but just like any other financial activity the opposite is also an opportunity for those willing to exploit Its therefore an active management style not passive now that you are in the sport light with increased capacity among the local skills and centres like luse to benefit back to back on this

    yes issues of currency outlay,swaps/derivatives/risk management will need to be equal
    Its good that the investments decisions will now not be based on the USD/ZAR relationship, reducing the inflationary pressure on the kwacha as more will hold margin variations and portfolios in the K The Kwacha confidence will also be a good thing as trades rise on the local dua listed on luse/JSE

  12. Trades at JSE are highly efficient and rather than bench marking far it will also provide a check on luse and see how the quality of our economy and business development is That will often be see on the behaviour of the kwacha there

    There has to be careful look at the trade direction in Zambia’s commodities and capital and weigh the effect of that to protect and get strategies correct.

    I have moved on for now

  13. Wanzelu, nastrofimofimo and other brainless up nd cadres are so quite after reading this piece of news. Their behavior can be equated to when they lost elections.

  14. Can someone tell me how I can relate this development to the fact that only a few months ago we made a U turn on an SSI that the MOF had issued making it mandatory for people to quote in kwacha and not dollars. Just need some guidance from wiser heads than mine.

  15. @B R Mumba, Sr. you have said a lot of untruths, so sad. The kwacha as not been made an international reserve currency by merely listing it neither does that make our TBs attractive. The key thing that makes TBs attractive is the yield not currency listing. Your posts are a crime against economics. And what on earth is “GDP output with a constant annualized growth”

    • @ Vilifier:

      Please read the actual writing not what you think I wrote. I did not mention “international” reserve currency, so where did you get from. By listing it it merely becomes a reserve currency because only the USD is considered the “international reserve currency”.

      You sound to have very limited knowledge on this subject matter if you can’t even understand GDP with a constant annualized growth. This is simply a measure of GDP growth from year to year in incremental phases.

      What other things are untruths here … now back to TBs yield is not the only item required to make them attractive. The US TBs have the lowest yield of industrialized world and yet China holds $1.264 trillion of US TBs, Japan is next with $1.219 trillion followed by Belgium at $352 billion.

    • I have worked in the industry and I am a highly trained individual on this subject matter so if you want to discuss this …. bring it on but be ready to argue with facts. Otherwise, find something else to vilify and ain’t got time for nay sayers.

      ZMK TBs have a higher yield than even US TBs, why don’t we have similar volumes if not higher than US’s if yield was the only factor. Too little information is always dangerous especially in the hands of those who are not real patriots.

      Enough said!!!

    • @ BR Muumba Sr

      The mere fact that you mentioned reserve it is logical to conlude that you meant international reserve, If it is a reserve currency you say it has become, who else will be reserving, who should be reserving it. The lower yields on the US bond are due to the lower country risks, not listing.

      You could be highly trained but you need to hold back your exaggerations and misinformation like the inflation rate reducing. The reason why I wondered about the annualised growth is because i just cant get in what context you are applying that theoretical measure.

      Seriously, as an expert you claim to be, they only way you were going help us understand this move is by starting with the fact that, legalised gambling in the kwacha has begun on the JSE.

    • @ Vilifier … you wrote and I quote, ” …. The mere fact that you mentioned reserve it is logical to conclude that you meant international reserve”

      My comment … assumption is the lowest level of knowledge!!! The very fact that you would make a conclusion based on assumption leads me to believe your “logical” apparatus is still flawed. You can’t even quote reputable facts that are verifiable, just mere talk.

      Your capacity to reason at a higher level still needs time for honing. Further still, your inductive and deductive reasoning may require more work too otherwise at this level, more analysis may just lead to more paralysis in your case.

      As for the ZMK analogy for gambling, welcome to the big league. I am sorry, I can’t help you any further … thanks a trillion.

    • I sense you are trying to chicken out. Do your research, you said “reserve currency” and this can be interchangeably used with international reserve currency. I wont make academic arguments like yours because i am not an academician. But you clearly said something like “Kwacha is now a reserve currency”, really? just because of listing on the JSE, Now that is poor inductive reasoning.

  16. To improve awareness on luse trades and listing, a TV network with online feature to luse trading floor allowing participants to follow and create the appetite to participate

    Its cheap way to create awaness and create an information efficient exchange creating volumes in trade and attracting blue chip yet not noticed Zambian companies at it where

  17. Like CNN or SKY even CNBC with a plug into the trading floor and carefully tapping the news on events and reports on indexes on assets trades announcing the opening and closing with a feature of an exciting thing or some event right from the floor and screens or is it main frames the way they have it on their web site reaching a wider audience and space

    A dedicated channel I know it could be slow but working with partners like CNBC and JSE will help to increase that vital information efficiency in all asset classes traded on luse

  18. Okay indices I also only hope we move to that and subject firms and luse to performance evaluation according to the best standards to ensure we track the gains we will achieve-The global investments performance standards on all asset classes that will result in increased trades as a result

    Its not also just annualised by effective rate “”GDP”

    • @ B R Mumba,Sr. and Jonathanmhango Financial Analyst

      I like your contributions on this matter. Please help many of us readers of this article to understand what this means for us. What effect does this development have on our import and export transactions? Will this weaken our Kwacha further?

      You comment please for the benefit of the un educated masses out there.

Comments are closed.

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