Africa
With Political Volatility on the Rise, South Africa’s DCM Prospects Remain Challenged
The past year has not been kind to South Africa, with a recent reprieve from a sovereign credit rating downgrade one of the few pieces of good news to greet analysts, the country’s treasurers, CFOs and capital markets professionals. Despite a brief upswing in activity through Q4, there are reasons to suspect the DCM outlook remains challenged to say the least.
12 Jan 2017
Kenya Outperforms but Long Term Challenges Remain
As one of the largest and most diversified economies in Africa, Kenya is currently outperforming many of its neighbours. As a net commodities importer, the country has been comparatively insulated from the impact of depressed oil prices and volatile agricultural goods markets on government budgets and economic growth. While medium term growth looks healthy, long term structural challenges remain.
13 Dec 2016
Miner’s Canary of FI Consolidation in Kenya: Mauritius’ SBM to Acquire Fidelity
SBM’s acquisition of Kenya’s Fidelity Commercial Bank Ltd. shows there is plenty of interest among foreign lenders in Kenyan equity, but the symbolic one dollar price indicates that smaller entities are still under threat.
24 Nov 2016
Weak Demand for Nigeria Bond Signals Continued Market Discontent with Currency Controls
As low oil-prices continue to devastate the Nigerian economy, painfully low levels of participation seen in last Wednesday’s sovereign issuance once again highlighted the need to free up the African country’s capital and FX markets before real progress can be made.
22 Nov 2016
South African Fundamentals Boost to Credit Despite Expected Downgrade
South Africa’s expected downgrade is unlikely to significantly rock the markets as they are likely to have pre-empted the rating agencies’ decision, factoring in a likely downgrade. Nevertheless, there will be some short-term volatility, but relatively strong fundamentals, low liabilities and a tentatively improving rand mean that the country’s debt could be a worthwhile buy when the downgrade…
9 Nov 2016
Sub-Saharan Africa Not in Debt Crisis… Yet
Sub-Saharan Africa (SSA) is not yet facing a debt crisis, and issuing debt is the only way for the economies of the region to fund their existing debt and finance their budget deficits. However, prudent use of funds is necessary to maintain credibility otherwise Eurobond funding is likely to dry up, the cost of which local and concessional borrowing alone will not be able to cover.
2 Nov 2016
Mozambique will restructure, but opportunities ahead
Mozambique will restructure its debt in order to obtain additional IMF financial aid. While the announcement came as a surprise to some, it didn’t to many investors involved in the ‘Mozambique story’ so far. Nevertheless, the country’s large gas reserves mean investors that stick around could reap big rewards in the long-run.
28 Oct 2016
Nigeria’s FX policy deters investors, may lead to corruption
Foreign investment to Nigeria remains stagnant as the country’s FX problem persists despite a partial devaluation of the naira. Although the country has the reserves to partially prop up the naira at the official rate for some time, in the long-run the system is unsustainable, while the mismatch between the parallel and official rates presents too many opportunities for corruption.
26 Oct 2016
A Tale of Two Corporates: Nigeria’s First Corporate Eurobond Sales of 2016
October has seen the first two corporate Eurobond issuances from Nigeria for the year. While the market has been waiting anxiously to see the sovereign issue their highly anticipated Eurobond, two corporate issuers managed to beat it to the finish line.
20 Oct 2016
Kenya’s Treasury exploring potential yen, yuan borrowing
The Kenyan government may look to tap the yen and yuan markets to enable to country to access new pools of investors. Although China is likely to remain the dominant lender to the country, its relatively strong fundamentals versus its peers mean it will likely be one of the more preferred investment destinations across Africa for investors globally.
19 Oct 2016