Zambia Stock Exchange Eyes Hefty Bond Sale

Zambia Stock Exchange Eyes Hefty Bond Sale

From Bloomberg

Zambia’s stock exchange, Africa’s fourth-best performer this year, is turning to companies and finance institutions to tap growing demand for debt with as much as $1 billion in bond sales as the government boosts spending to sustain growth.

The African Development Bank is set to follow the International Finance Corp.’s local-currency Zambezi bonds that were 4.8 times oversubscribed when 150 million kwacha ($28 million) of the medium-term notes were sold, the IFC said Oct. 3. Standard Bank Group Ltd. (SBK)’s Zambia unit has registered to sell 1 billion kwacha of debt, according to the country’s Securities and Exchange Commission.

“Our markets are certainly poised for a take-off,” Wala Chabala, chief executive officer of the commission, said in a phone interview on Oct. 22 from Lusaka, the capital. “We are having quite a resurgence of capital markets in the country.”

Companies in Zambia, Africa’s biggest copper producer, are benefiting from an economy that’s expected to grow 6 percent this year and 6.5 percent in 2014, according to the International Monetary Fund, as the government tries to accelerate development. Finance Minister Alexander Chikwanda increased spending for next year by 33 percent, with the biggest allocations going to roads, education and health care.

Yields on Zambia’s Eurobonds due September 2022 were little changed at 6.68 percent by 6:21 p.m. in London, the lowest since June 19. The yields have risen 1.25 percentage points this year to yesterday, compared with a 0.97 percentage-point advance in Nigerian debt due January 2021, according to data compiled by Bloomberg.

Read more at bloomberg.com