Member Info for Rufiji

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.

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

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.

They are playing very hard ball and.also with the JNB LUN possibility. They see these routes as.the remit of the proposed new.state airline. However, the reported purchase of Russian planes to fleet Zambian Airways does.not.seem to have much progress so there is hope

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

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.

SAA/SA Airlink/.LAM have a tight hold on all the routes out of JNB to Mozambique incluidng Pemba, Maputo, Beira and Nampula plus I think Vilanculos. LAM and PRECISION fly DAR-PEMBA. I think that the authorites are not at present prepared to disturb these arrangemnts as the revenues underpin the finances of these airlines, SAA/Airlink would fight tooth and nail. LAM and AirZim have tried HRE-Maputo but loads were very disappoinitng and with Beira being the main entry port for Zim and only a three hour drive. MAPUTO to the regional centres were always flights well patronised when I was spending time in Mozambique, and news that Anadarko is close to restarting the massive offshore gas exploration off Pemba would add to the attraction. Maputo Lusaka may be worth a try as Mozmbique clearing agents are actively pushing Maputo as the entry port for Zambia, given congestion at Durban and high charges at Dar, and the road through Tete to Katete and down to Lusaka is pretty good so avoidng anything to do with Zimbabwe, but the Zambian Government does not seem to be a close ally of FJET. Bear in mind that Mozambique is currently going through difficult economic times as a result of the World BAnk suspending loans on account of major government malfeasance, and the commercial environment is difficult. ( when I worked there in the early 2000s buisness was still guided by the 1910 Portuguese Commercial Code !!!)But there should be enough traffic to target and a resumption of the major rnrgy projects would be a boostt

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.

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.

Well, a look at the local political blogs ( try Zambian Watchdog) suggests that it is Zambeef that has been getting one ( or 16 million of them) over the Zambian Governement after having squandered around $20 million on the palm project originally. We now seem to be rid of all the Amanita dross which is good news even if shareholders paid a material price ( imo almost certainly Amanita was a major cause of the share price collapse). Perhaps also management can focus on managing the potentially very profitable core buisness as opposed to hubristic deal making. The Irwin family were very close to Sata so perhaps influnetce remains with the PF government. Carl Irwin is also a calming influence on Grogan who has vision but not perhaps application. Unlike with edible oils ( Amanita) where barriers to entry were low for savvy new entrants, they are much higher for the cold store and beef, pork and chicken components. The partnership with Shoprite is going well. Less enthusiastic about the cropping side. processed meats

Repaying the debt de-risks the balance sheet and.mitigates against the negative impact.of forex movements. The ZK peaked at around 8.5/$ in mid summer but has since retreated.to.9.7 and.could go lower if IMF talks.are.delayed plus pressure on Bank of.Zambia to reduce interest rates. Against this backcloth not repaying the debt could have led to material negative forex.adjustments. The totally integrated business model does.not.convince me as it seems.rhat management.have to be.competent in managing risk all.along the .cropping,.production, logistics and front end chain, so pleased.to see some.greater focus. Moreover.the marriage with Amanita was a shoe in for divorce. The good news.is that prospects for.cold.storage, meat and chicken production seem excellent.with consumption increasing and.Shoprite supermarket continuing to expand.outlets .:

Will not Impact the P&L . Will bridge the gap in the cashflow

Fair point but there will be non flying set up costs such as premises, pre operational staff recruitment and training, marketing, licences etc. Plus lease costs will still be proportionately large.

I am not sure we will break even especially with Mozambique set up costs and additional up front lease fees. However, we could see good improvement in cash flow that would underpin the share price and even push it a little higher. Well, hopefully ,!!!

While there was no direct director investment Solenta increased their holding. While I am pleased with the market response I remain cynical about Solenta, and feel that shareholders are taking the recovery risk only for Solenta to lap up the cream through a takeover.

RSA government today announced a further material bail out of SAA. So no change there it would seem.

Agree, the further share issue and dilution was.not.anticipated given indications made earlier. I cant help thinking that Solenta would pounce on any positive opportunity to buy the.company. 3-routes.ex.JNB to,Maputo, Beira ,.Nampula/ Pemba have potential, but Mozambique not the.easiest market in which to operate,.

Usually not a good sign; we will have to see what emerges tomorrow