Caleb M Fundanga: Developing Zambia’s Stock Exchange Remarks by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the official launch of the BancABC Central African Stock Exchange Handbook, Lusaka, 26 July 2011. *  *  *    The Chief Executive Officer of ABC Holdings - Mr Douglas Munatsi    The Managing Director of BancABC Zambia Limited - Mr Dana Botha    The Managing Director of Lusaka Stock Exchange - Mrs Beatrice Nkanza    Management and Staff of BancABC    Chief Executive Officers and Representatives of various Institutions present;    Distinguished Invited Guests;    Members of the Press;    Ladies and Gentlemen. Let me begin by thanking the management of BancABC for inviting me to this occasion, which marks the official launch of the “Central African Stock Exchange (CASE) Handbook”. I also wish to thank the Managing Director of BancABC, Mr Dana Botha, for sending me a copy of the CASE handbook. The handbook provides a snapshot of various company financial results, share price performance and volumes traded in 2010. The handbook also highlights basic information on investment and borrowing options, which will not only assist investors diversify their portfolios but also assist in reducing transaction costs in our stock market. Ladies and Gentlemen, The stock market is an important avenue for harnessing resources for the financing of development in our country.
There is no other way to forecast future developments intelligently than to examine the indicators from the recent past, apply to them the metrics that the copious experience from Iceland and abroad has taught us to use, and to use both indicators and metrics as a guideline in projecting future developments. If we didn’t use this method, there would only be one left: to pour tea into a cup, turn it upside down, and read the tea leaves when the saucer is dry. The Central Bank has no comment to make on those who wish to pursue that course, but it isn’t likely to be terribly successful. When the Central Bank announced its interest rate decision, it stated that several factors that have made inflation harder to control could change over time. Sooner or later, higher mortgage interest rates will affect the real estate market. Global financial market conditions have changed for the worse. Those changes are already being felt, and sooner or later they will be felt in Iceland as well. In its forecasting, the Bank takes these factors into account, and it does not rule out the possibility that their actual impact will be greater than projected. Many people hoped that the unrest in the financial markets, which stems largely from the subprime mortgage market in the US, would blow over rather quickly. Some even seemed to believe that a modest drop in US interest rates would be sufficient to coax everything back into place once again.