THE strong rally in the price of Copperbelt Energy Corporation Plc (CEC) shares on the Lusaka Stock Exchange (LuSE) seen over much of this year is indicative of the return of investor confidence to the Zambian market.

CEC’s share price made massive gains to reach a high of K4, becoming the most valuable stock by market capitalization on the LuSE and holding the position for about 10 weeks, from its lows of around 70 ngwee per share only a year ago.

Commenting on the performance in a recent interview, company Chief Financial Officer, Mutale Mukuka observed that the company’s current performance compared to only a year ago indicated that the market had priced in the risks that attended CEC from a sovereign and corporate perspective.

“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,” said Mukuka.

CEC executives and many economic commentators have roundly spoken about the improved business and economic environment and the government’s focus on anchoring recovery and growth on the private sector.

“With the resolution of some of the challenges and the risks that were perceived or real, what we have seen is that investors have slowly priced in the sort of de-risked business into the valuation that you see on the Lusaka Securities Exchange, which is a significant improvement from the numbers that we saw earlier. Now, we are at a place where the price depicts the scenario of willing buyers and willing sellers”, Mukuka explained.

He also spoke about how the restoration of contractual power supply and purchase arrangements with ZESCO Limited in April this year, after a two-year absence, bolstered market sentiment and contributed to the stock price rally.

And 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.

The ongoing turnaround of the stress the economy underwent prior to mid-2021 has paved the way for the renewed optimism and building fresh momentum in the electricity and mining industries, and other economic sectors, attested to in part by the general performance of the equity capital market, which has moved away from the heavy selling of stock such as CEC earlier witnessed as investor skepticism was being buttered. The economic recovery is also supported by a US $1.3 billion International Monetary Fund facility.

CEC floated 14 years ago, in an initial public offering that sold off 25% of its share capital with 5% reserved for its employees. It remains the only entity in both the country’s vast mining and energy sectors that enables ordinary Zambians to directly own a stake and the realization of the dream to have indigenous citizens participate in ownership of former parastatals.

Managing Director, Owen Silavwe, stresses that the company continues to create value for over 4,000 ordinary Zambians that have shares in the company and can openly interrogate the business.

“Today, CEC has 4,000 retail investors and because of its listing, the company’s financials are open. Therefore, they can take decisions to invest and divest out of this business. The people also have the ability to follow the investments that CEC is making, and its operations, and how those operations are actually evolving over time,” explained Silavwe.

He described CEC as a success story of the privatization dream of ensuring ordinary Zambians own stake in thriving assets that were previously owned by the defunct Zambia Consolidated Copper Mines.

“We are quite proud that we continue to a create a story that a lot of Zambians have come to love, and a lot of Zambians have been able to associate themselves with this story – whether it’s through investments or through sports, which we are quite passionate about and continue to support,” said Silavwe.