The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
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The FMD outbreak seems to be Sero 0 which type would be new to Zambia. It is quite widespread in East Africa and could have spread across a porous northern border. Chisamba is on the main road to Tanzania. The government claims 5000 animals are infected but that a vaccine has arrived and vaccination starts ths week. We will see. However, I have not heard of any escaltion of the problem but that is not to say that there is some concern. I am long term more concerned( more generally about Zambia) about the Land Reform Consultative Paper that has just been issued which favours very much indigenous Zambians and seeks to impose restrictions on non Zambian citizens and foreigners purchasing and amintianing land/property. The term of a holding lease for the latter category is being proposed at 25 years from 99 years, and the measure could be retrospective. A lot of space between lip and cup, but it would appear that the Paer is already having an effect with some developments cancelled.I think Zambeef would on the whole be OK.
Just back from a week in Zambia, catching up with old farming friends, The FMD is quite concerning and farmers are taking their own measures by sanitising all vehicles and persons entering farms, there appears to be no government support as it was Lungu himself who caused the outbreak, by gifting two buffallo to Botswana that were infected, rather than culling them, they were shipped back to Zambia. Something like that anyway, I was a bit p'ssd when this story was being relayed. Farmers are obviously concerned and prices are crashing, only yesterday I watched a load of cattle go off to market and my friend was not expecting to get much for them, but better to sell them now than risk infection. Cholera is pretty much under control, thanks too the government evicting 1000's from Kamwala market in Lusaka where it apparently originated from.But it may not be the end of it, the amount of new building going on, in and around Lusaka and the unregulated waste drainage that in some instances doesn't go anywhere, except into the water table, which of course is the same place the borehole drinking water comes from. On a positive note however there is surprisingly is very little malaria around. But hey it's Africa, if the little bitey b'stards don't get you, there's always another nasty that will. BTW, I'm not invested here anymore, but the co I used to be GM of, bought a farm from Karl Irwin and Francis Grogan in the early days Zambeef, and my kids went to school with Tony Irwin,( Karls brother), who owns Proflight, now Zambias biggest airline. Amazing how things have changed in the last 20 years. It was funny, I was walking through Lusaka airport and I heard someone calling my name, initially I thought I'd dropped my passport or something, but it was zambian local, who worked for me all those years ago... and he still recognised me. Wonderful place and people.
The strain of FMD requires the vaccine to be imported.from the.UK. Those mostly impacted.are white commercial farmers in the ZAMBEEF supply.chain. I note BLOOMBERG is repeating the.debt concerns raised last week in Africa Confidential and that the Zambia Eurobonds have come under some pressure..
Do I again detect that the company is being careful to avoid incurring tax liabilities? Foot and mouth I believe is handled via vaccine in Africa in preference to wholesale slaughter?? Anyone familiar? Any chance of this being a political dirty tactic against cattle rancher HH? It seems the impeachment action is hotting up the already volatile politics.....
ZNBC announced tonight that 15k cattle.COULD be.infected.by.FMD. Possible that.action has been taken in time to prevent a.major outbreak but will watch for.amy.change
DD77 I agree. Price to Book and Price to Sales are incredibly low; cash flow coverage of the debt and overall gearing are satisfactory while a recovery in profits to 2016 levels would see earnings per share of around 3p. Operationally the retail side is performing very well on the back of the Shoprite tie-up, while feedstocks is expandng and commodity prices are off the bottom, exchange rates are stable and no deterioration flagged in West Africa. Presumalby the very guarded commentary on FMD have reminded shareholders of the propensity of ZAM to be shot in the foot by significant negative exceptional items, both endogenous and of their own making. I will stand by my forecast of northwards of 20p.
Thanks Rufiji, I may look to top up/average down in the coming weeks, as I will have capital coming in from FENR when their sale goes through to Michelin. I do find the slump surprising but remain positive about the medium-long term. And the sale of Zampalm has now gone through too, so all the more surprising with the drop
The fall in the SP must be in reaction to the FMD concerns ( which are not getting alrmed coverage in the local press)as it would seem that there will be a recovery in profit in 2018 compared to 2017. As expected strong growth in retail driven by Shoprite outlets and some recovery in soft commodity prices. Cost increases are unfortunate but not enough to counter improvement in margins.I see every reason to hold. Share price has tanked ove rthe past 3 years but my take is that some recovery may happen this year. But may decline firther if overall stock market volatility increases and indices fall.
A positive trading statement would help and I am broadly positive. Decline in share price Friday may have been down to extremely negative report in Africa Confidential on Zambia's debt position. Out of control and approaching 100% of GDP according to AC. A new Land.Act.on the works and.rumours that the consultative paper to be issued imminently will give the nod.to popularism and indiginisation. We will.see
Excellent result bringing in $16m. Could be a great recovery story from here.
The half year normally throws up a prompt trading statement by ZAM. I guess the imminent Zampalm cash was a reason to delay, so maybe a trading statement on Monday? Unless the new guy is going to change the old habits and we end up waiting for the actual results?
They have got the zampalm cash! Not sure which dusty corner of the treasury they found that little stash!
The copper price supports the balance of payments and so the exchange rate,but not the fiscus as the.mining companies.wrenched severe tax and royalty concessions from the then government at privatisation and are experts at transfer pricing and VAT machinations. The revenue authority is claiming $8 billion from FQM for import duty evasion over a long period but that is a fantasy figure based on penalties on penalties. Still,indicative of a more hostile relationship between government and the mining industry. The root cause of the borrowing threat is trophy projects with no hope of an economic return ( the.new.airport and the resurrection of the national airline),'high recurring current expenditure, rising debt service.costs and poor tax collection. Of course corruption plays a major role in the form of insider rents and.contracts
Thanks Rufiji, knew borrowing was a problem as the civil service is bloated but thought the rising copper price would currently support it.........worrying
Yes,no problem re the disease but a political problem for the PF who have,cracked down on informal traders who have had their economic position downgraded. Was at a dinner party where some unreconstructed expat.demanded.that traders sling avocados/bananas and.grapes at traffic lights should be banned. If that happened and his sensitivities assuaged the crime rate would rocket.More worrying is the debt position;'very negative article in Africa.Confidential today.implying Lungu is continuing to support heavy borrowing and.overall dent.position is.getting out of.control with.norrowing possibly 100% of.GDP.Sorry.cannot.download.as.not.a subscriber
Has the cholera outbreak been contained and under control now Rufiji?
Given that the share price has moved down from 65p to 11p it just shows what reliance on analysts can do to your wealth. I do expect a better year this year in the absence of exchange losses, exceptional items ,plus ongoing growth in cold storage and retail and some recovery on soft commodities. However, this view is tempered by the probability that the Palm plantation sale is stalled and.there has been no progress is selling some of their other farm properties so no significant reduction in debt
How Many Zambeef Products Plc (LON:ZAM)'s Analysts Are Bearish? Reurope-2 minutes ago Among 2 analysts covering Zambeef Products PLC (LON:ZAM), 2 have Buy rating, 0 Sell and 0 Hold. Therefore 100% are positive. Zambeef Products PLC had 21 analyst reports since August 5, 2015 according to SRatingsIntel. As per Friday, November 25, the company rating was maintained by FinnCap.
Wish id outed 100%!!
The government has no money to pay wages and no IMF loan. Finance minister just changed too. Cannot see this deal going through even with the month extension. Would have looked a bad story to come out at the same time as the big splash in the Daily Telegraph
In the DT today an 8 page pull out titled 'A Giant Awakes' towards a brighter future. Not one mention of Zambeef!
Usually a good sign. Seems to have hovered around this price for a while , perhaps time for a rise.
Zambia's financial problems got an airing yesterday as the IMF prospective funding was.formally announced as "dead". The sacking of the well regarded finance minister was also a surprise, but perhaps not surprising as Lungu battens down with an increasingly narrow band of supporters. Many of the big PF beasts of the Sata era have left or have been marginalised. Not sure the markets fully saw this coming and perhaps the weakening of the ZKW rowards 10/$ was evidence to the fact. There is some potentially very good news on future copper reserves and production but will advise if I get greater detail. Still looking for an uptick in the share price as do not think the consequences of the debt trap or current political manoeuvres will be felt for a couple of years.
Unusual lack of volatility since start of year. Looking back to last period like this, a small dip led immediately to a surge. Expect a surge as we approach first half update. Politics as ever is the elephant in the cattle ranch!
Thanks for the update Rufiji, always insightful