By BUUMBA CHIMBULU
The Copperbelt Energy Corporation Plc (CEC) share price has made massive gains to reach a high of K4, becoming the most valuable stock by market capitalisation on the Lusaka Stock Exchange (LuSE).
This strong rally in the price CEC shares on the LuSE seen over much of this year is indicative of the return of investor confidence to the Zambian market.
CEC has been holding the position for about 10 weeks, from its lows of around 70 ngwee per share only a year ago.
The company’s current performance compared to only a year ago indicates that the market has priced in the risks that attended CEC from a sovereign and corporate perspective.
This is according to the Chief Financial Officer, Mr Mutale Mukuka in his comment on the performance of CEC in an interview.
“We are assessed by what the market believes is the intrinsic value of the business and in the last few years, there were a couple of challenges…the many court cases, for example, and what we saw is that investors priced in some of the risks that crystalised in the business,” Mr Mukuka said.
He said CEC executives and many economic commentators had roundly spoken about the improved business and economic environment and the government’s focus on anchoring recovery and growth on the private sector.
Mr Mukuka also spoke about how the restoration of contractual power supply and purchase arrangements with Zesco in April this year, after a two-year absence, bolstered market sentiment and contributed to the stock price rally.
In November, CEC announced a consent judgment entered with all other parties involved in the dispute concerning the increase of power tariffs by the industry regulator, Energy Regulation Board in 2014, and which matter the mining companies took to court.
And Managing Director, Owen Silavwe, stressed that the company continued to create value for over 4,000 ordinary Zambians that had shares in CEC and can openly interrogate the business.
He described CEC as a success story of the privatisation dream of ensuring ordinary Zambians owned stake in thriving assets that were previously owned by the defunct Zambia Consolidated Copper Mines.
