The Editorial Team |

After Record Rate Cut, Egypt May Pause to Defend Against Selloff

CAIRO (Capital Markets in Africa) — After making its biggest-ever interest-rate cut, Egypt is likely to hold fire Thursday as it tries to ringfence its debt from an emerging-market selloff sparked by the coronavirus. While central bank Governor Tarek Amer has said there’s scope for another reduction if needed, nine of 10 economists surveyed by Bloomberg predicted the Monetary Policy Committee will maintain the key deposit rate at 9.25%. One analyst sees a cut to 8.25%. It slashed rates by 300…

South African Banks Cut Deeper Into Junk by Fitch on Virus

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JOHANNESBURG (Capital Markets in Africa) — The credit ratings of South Africa’s five largest banks were downgraded deeper into junk by Fitch Ratings, which cited a deteriorating operating environment following the outbreak of the novel coronavirus. The ratings were reduced by one notch to BB, two steps below investment grade and one notch lower than that of South Africa, Fitch said in a statement late Tuesday. Moody’s Investors Service also lowered its assessment on the…

Zambia Eurobonds Extend Losses as Country Flags Restructure

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HARARE (Capital Markets in Africa) — Zambia’s Eurobonds extended losses on Wednesday and its currency tumbled to a record low after Africa’s second-biggest copper producer asked banks for proposals on reorganizing as much as $11.2 billion of foreign debt. The country “intends to implement a liability management of its external debt portfolio to lengthen maturity and enhance its capacity to meet debt-service obligations,” the finance ministry said in a request for proposals sent to lenders,…

Ghana Cuts GDP Growth Forecast to 37-Year Low on Virus Impact

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ACCRA (Capital Markets in Africa) — Ghana’s Finance Minister Ken Ofori-Atta cut the country’s economic growth forecast for 2020 to the lowest in 37 years due to the collapse in oil prices and the impact of the coronavirus. Growth in gross domestic product could slow to 1.5% with a partial lockdown of the economy and may “further worsen in the event of full lockdown,” Ofori-Atta told lawmakers Monday in the capital, Accra, according to a…

Junk Rating, Virus Hit South African Banks Trapped in Recession

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JOHANNESBURG (Capital Markets in Africa) — As if an all-but-dead economy wasn’t enough, South African banks must now navigate a downgrade in the nation’s credit rating to junk just as the coronavirus sinks any chance of recovery. Banking stocks slid with the rand and local bonds on Monday after the continent’s most industrialized economy lost its last investment-grade rating from Moody’s Investors Service, which maintained a negative outlook. The coronavirus pandemic means the country, already…

South Africa Is About to Find Out the Cost of a Junk Downgrade

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JOHANNESBURG (Capital Markets in Africa) — Africa’s most industrialized nation is waiting to discover the cost of being downgraded to junk. South Africa lost its last investment-level rating late on Friday when Moody’s Investors Service downgraded it to Ba1, citing a weak economy and an unreliable power sector. When markets re-opened on Monday in Asia, the effect was immediate. The rand fell to a record low, weakening beyond 18 per dollar for the first time. The…

Fitch Downgrades 3 Nigerian Banks to ‘B’, Places All 10 Banks on

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LAGOS (Capital Markets in Africa) – Fitch Ratings has downgraded the three-highest rated banks in Nigeria, Zenith Bank (Zenith), Guaranty Trust Bank (GTB) and United Bank for Africa (UBA), to Long-Term Issuer Default Rating (IDR) ‘B’ and Viability Rating (VR) ‘b’. Fitch has also placed the Long-Term IDRs, VRs and National Ratings of all 10 rated Nigerian banks (excluding Stanbic IBTC Holdings (SIBTCH) and Stanbic IBTC Bank (SIBTC) – which are not assigned VRs and…

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