THE market value of the Lusaka Stock Exchange (LuSE) has dropped by more than two percent since last year, largely due to the growing United States economy.
Minister of Finance Alexander Chikwanda said on Friday that as a result of the expanding US economy, the LuSE has seen a decline in market capitalisation from K66.5 billion in 2014 to K64.6 billion this year.
Speaking at his 2016 national budget presentation in Lusaka, Mr Chikwanda said the decline in LuSE’s market capitalisation represents a 2.7 percent drop.
“Market capitalisation declined by 2.7 percent as at end of September 2015 to K64.6 billion from K66.5 billion as at end of December 2014,” Mr Chikwanda said.
He said trading activity also declined this year due to the strengthening of the United States economy. The American economy is buoyed by portfolio investments out of equity in developing and emerging markets.
The all-share index also declined by 5.9 percent from 6,160.7 as at December 2014 to 5,800.2 this year due to a general fall in share price.
Mr Chikwanda, however, said Government remains committed to the growth of the stock exchange to facilitate long-term financing for private sector investment.
To sustain LuSE’s growth, an alternative investment market was launched in April this year to cater for emerging corporates that are yet to meet the listing requirements on the local bourse’s main window.
Mr Chikwanda said to increase opportunities for Zambian citizens to participate in economic development and to comply with listing requirements on the LuSE, Government has started a process of reducing its shareholding in ZCCM-Investment Holdings Plc.
In this regard, the process of offloading K15.8 million shares, representing 36 percent of the National Pension Scheme Authority and the balance of the shares is on-going.
On empowerment, Mr Chikwanda said Government has allocated K187.5 million to the Citizens Economic Empowerment Fund, K150 million for the action plan on youth employment and empowerment and K35.7 million to economically empowerment women.
Another K49.5 million has been allocated for youth skills training and development programmes.