The Editorial Team

Emerging-Market Carry Bets Declared ‘Dead’ on Strong Dollar

LAGOS (Capital Matkets in Africa) – A strengthening dollar is reducing the appeal of emerging-market carry trades, which handed investors their biggest monthly loss in 18 months. An index that measures returns from borrowing in dollars and investing the funds in eight high-yielding currencies, such as the Turkish lira, Brazilian real and Indonesian rupiah, lost 3.3% in September, the most since March 2020. The Bloomberg Cumulative FX Carry Trade Index is now down 1.2% this year. The…

China Is Sending Shockwaves Through South African Markets

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JOHANNESBURG (Capital Markets in Africa) – South African stocks are feeling the pain coming from China. The country’s benchmark equity index has posted its worst quarter since the first three months of 2020 amid concern about an energy crunch weighing on China’s economic growth and Beijing’s regulatory crackdown on key sectors including technology. China is the biggest buyer of South African raw materials. With the 18-month rally in industrial metals on shaky ground, and the Federal Reserve…

Ethiopian Eurobond Yield Surges as Political Crisis Deepens

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ADDIS ABABA (Capital Markets in Africa) – The yield on Ethiopia’s $1 billion of Eurobonds surged after the government’s expulsion of seven senior United Nations officials drew criticism from the UN chief and a fresh threat of U.S. sanctions. The rate on the debt jumped 24 basis points to a record high of 12.1% by 11:17 a.m. in London. The yield has almost doubled since a conflict erupted in the country’s northern Tigray region in…

Biggest Africa Fund Manager Without Key Mandate From Main Client

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LAGOS (Capital Markets in Africa) – Africa’s biggest fund manager said its 70 billion-rand ($4.7 billion) unlisted assets division has been without a mandate to invest from its largest client since March, highlighting the dysfunction in the unit that drives investment in Black-owned businesses. The five-year agreement with the Government Employees Pension Fund, which accounts for 89% of the Public Investment Corp.’s total assets under management of 2.34 trillion rand lapsed on March 30 and has…

BP Trader Dealings With Nigerian Middleman ‘Didn’t Smell Right’

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LAGOS (Capital Markets in Africa) – A BP Plc executive told internal investigators he was concerned about the energy giant’s dealings with a Nigerian middleman and payments being discussed to secure lucrative contracts. The suspicions didn’t make it into the investigators’ final report, which emphasized that the 2017 deal never went through. But notes from their interviews show a senior executive at the company’s London headquarters was worried that proposed payments to an agent in…

Fitch Ratings: Synthetic Libor Proposal Would Minimise Near-Term Risk for UK RMBS

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LAGOS (Capital Markets in Africa) – Fitch Ratings-London, Milan-01 October 2021: The UK Financial Conduct Authority’s (FCA) proposal to permit the use of synthetic sterling Libor fixings beyond end-2021 would lower sterling Libor transition risk for legacy UK RMBS next year, Fitch Ratings says. If adopted, the transition period for affected transactions would effectively be extended by 12 months, during which Libor exposure will decrease further. The FCA said on 29 September it would require…

Even A China Ban Can’t Seem To Kill Bitcoin FOMO: Lionel Laurent

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NEW YORK (Capital Markets in Africa) – The cryptocurrency crowd has wasted no time in dancing on the grave of China’s “FUD” (internet speak for fear, uncertainty and doubt). Last week’s move by the People’s Bank of China to ban crypto transactions and mining dented the prices of Bitcoin, Ethereum and other digital currencies, but they’ve largelyrebounded. The bulls reckon the latest attempt by Beijing to crack down on crypto — the seventh, by research…

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