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New money man from CDC coming in. Does that mean unlimited financial backing for purchase of Zimbabwean farms now Mugabe on his way out?
ZAM reports on Wed (16/11).
You will remember last year's annual profits were flattered by c.USD 8m reduction in administration expenses else broadly in line with 2015 (USD 0.941k). Upcoming F/Y will show a small profit as per the last 'Septoria' update announcement later this month.
I agree the sentiments but would.be wary of taking anything at face value out of the Government mouthpiece that is ZNBC. The challenge is that Zambia since independence has had a food policy that favours cheap grain for the urban masses in order to suppress political protests from volatile sections of the population.The maize price imposed this year was below the cost of production and.export bans come and go. The pastoral sector has been generally ignored with Zambia having around 3 million cattle compared with Kenya's 15 million on the same pastorage. Elsewhere the storage and logistic framework is primitive ::) ::).There have been some promising advances in potatoes, vegetables, soya honey rice and meat particularly pork and chicken but much more is needed to scale up. ZAM is working to drive up meat production particularly chicken but in cooperation with RSA companies.that may not benefit local producers. For the next two years a rising population and higher disposable income will be imo the key drivers.for ZAM and I am positive providing the regular extraordinary corporate disasters are avoided.
Interesting read. We know the opportunities for Zam and Zambia in general wishing to diversify away from mining. Agriculture is the surest way to achieve long term growth of the economy as long as eating food don't go out of fashion. A growing population will see to this with demand expected to triple from $8bn to $24bn by 2031, that's a lot of hungry mouths to feed in Zambia and the surrounding countries. Zambeef is best placed to supply the increasing demand for basic foodstuffs. If only the market could look beyond tomorrow?.....
Government is on course to diversifying the economy from copper to agriculture. https://www.znbc.co.zm/zambia-to-be-major-exporter-of-agric-products/
Interesting to see if the rise in copper prices is structural or merely the unwinding of chinese structured trade finance positions. If I were pushed Glencore would probably be my.pick as they have considerable exposure to colbalt which is.key to the move to electric vehicles,.but better to wait.and.see if movement is sustainable.
I'm afraid London Mining scared me off the sector and it's been rerated upwards considerably (copper in CAML's case) since 2016 as metal prices have increased. Not getting involved unless my partners decide to out Zam. Unfortunately they tend to leave the "'sell"' advice to me....so it's a 'what do you think John?" Having come a cropper elsewhere my confidence in stock picking and let's face it that's the name of the game is pretty much shot and when you lose your confidence you dither or make the wrong move. Joining a train steaming off into the distance doesn't appeal. Atm there's no compelling reason to sell out of Zam a Co thats so dominant in the region. Even with the political background it's a 60/40 risk I'm reasonably happy with. Having said that I'll put CAML on my watch list. PS like your 'BadAdvice' moniker!!!
Try caml to benefit from the trend up jl
DD77 bit of both it would.seem. The government.seems reluctant to tackle.excessive current expenditure while.infrastructure spandimg.contiues.to.balloon. Much of the incremental debt is by way of guarantees and murky Chinese borrowings which may be repaid at the end of the day by land allocations and the like. Short tern the money being pumped into the economy may boost consumer.spending and.ZAM but a red flag for.later on
Thanks Rufiji, I'd read an article on the FT I think a week or so ago (wish I'd saved it to post here) but the essence of it was some African countries which heavily relied on commodities as a part of GDP (such as Zambia) were running up debts, not to invest in infrastructure but to fund day to day salaries of civil servants etc which is clearly a slippery slope. Hopefully the price of copper continues to recover but Zambia and a couple of other nations in particular were singled out for this, and there doesn't appear much confidence in current leadership. Time to buckle up, bunker down and ride out the storm
Spot copper at $7000 a tonne up 27% ytd.
The Zambian kwacha continues to.weaken.from a peak this year of around 8.5 to.a.current 9.88 and 10 is in view. Persistent talk that the IMF deal is.not.going to happen.anytime soon, but we will see. If it does not.happen, not sure that this.possibilty has been priced by the market but neither seems to have been the sharp upward leap in the.copper price. I expect further ZK weakness short term.( a lot of.people have been long chasing yield.) and paying down the debt seems to have been a good move. Further out the currency should stabilise if.copper remains.bouyant,.but the.government has an opioid like addiction to borrowing.
There is an explanation for the big sells and buys over the last few weeks. Seems to have been between willing seller/buyer as no move in share price. Presumably buyer has remained below radar %age?? Who is the buyer?
Hi Trodat Nice to bump into you again. We are in the same boat. At least the Government seems.better disposed to ZAM than to FJET
Thanks Rufiji for your Zambian insights. I am holding out for ZAM and FJET to bounce back.
Hello John, Shopritte , in round figures, turn in an operating margin of 5% at Group level and a RoI of around 21%. These would be based on Rand figures so an equivalent risk adjusted return in sterling would be around 15%-16% ( still very good). I would guess UK supermarkets would have an operating profits of 3%-4% and an RoI of 12%-14% Just think of what the ZAM share price would be if only we could start to move to this position !!!! We can all hope. Shoprite is a bit of a curate's egg combing a mature South African business with a emerging and fast expanding Rest of Africa operation, so the margins could be being held back by upfront capital costs and amortisation thereof ( long term shop leases, fit out costs and infrastructure such as warehouses and logistics)
Kenny, interesting but that figure is Africa wide. For ZAM the number of new stores being opened in Zam, Nigeria and Ghana is the key.
Shoprite opens 14 new stores in one week Fin24-28 Sep 2017 Shoprite said it was on track to open 82 stores in the 2017/18 financial year, ten more than the 72 stores it opened in the 2016/2017 year. http://www.fin24.com/Companies/Retail/shoprite-opens-14-new-stores-in-one-week-20170928
Good morning all..& Rufiji whom I take it lives in Zambia? Good to have a pis on the ground so to speak......who will be able to ferret out the latest info much better than us UK domiciles. OP margins or cost of sales denotes how well a Co is run, we certainly don't want the economics of football clubs where a 90p of 100p at the gate disappears into the players pockets! Rule of thumb gross margin across food & retail is c.30-40% given average trading conditions. This would be a UK number so may not apply in Zam though I'd expect the % to be broadly the same. Good to have you on board...
DD, thanks. Not counting new stores opened at Waterfalls and.Kabanga near.the National Stadium on Great North Road, Shoprite to open 5 new.stores by.mid 2018; 3 in Copperbelt,'Mwansa in Luapula and a flagship store at the St Mary's school site in upmarket Kabulonga.giving 36 in total ZAM should get the butchery concession in each plus Hungry Lion supply.contract ,which is a strategic partner for Shoprite .Surely we cannot.kick this spot kick wide.
Thanks Rufiji, good info. And I completely agree, operating margins are a concern and should be a focus for improvement
Coming in from the airport stopped at the new Waterfalls Mall at the airport turnoff. Shoprite.and.Hungry Lion busy and ZAM running the butchery and supplying Hungry Lion. Insiders tell me Shoprite opening another 10,supermarket/Hungry Lion combos across the country so we should get some revenue traction. Also talk that ZAM have a deal to seriously leverage up chicken production in JV with RSA company. If only Grogan can focus on improving operational margins rather than indulging in headline corporate actions.
Rev, yes, the word is that the IMF has discovered an additional $4 billion of government borrowings and it may be that this scuppers the IMF funding. Decision pushed back to early 2018 so hotel bar chatter has it. Feedback is that the IMF wants to assist but government transparanecy on commitments a problem, Apparently plenty of government guarantees supporting new projects and investments and Chinese loans opaque. Difficult to know how the exact position and how it will all play out.