Economy

JOHANNESBRUG (Capital Markets in Africa) – South Africa’s longer-maturity debt and the low level of foreign-currency bonds is “more of a strength than a weakness” for the country’s credit rating, according to Moody’s Investors Service. While 37.9% of the government’s rand-denominated debt is held offshore, it poses less risk to the sovereign because investors bear the brunt of foreign-exchange shocks, Lucie Villa, Moody’s vice president and lead sovereign analyst for South Africa, said Tuesday. That, and…

CARIO (Capital Markets in Africa) – Positive inflation reading in August, below expectations, despite seasonality Annual headline inflation saw a deceleration to 7.5% in August, well below both our estimate of 8.4% and July’s reading of 8.7%, on the back of a monthly rise of 0.7% vs our estimates of a rise of 1.5% and July’s monthly rise of 1.8%. August’s reading marks the lowest inflation reading in six years, which was aided by the…

JOHANNESBURG (Capital Markets in Africa) – Talks around restructuring Eskom Holdings SOC Ltd.’s bonds must be approached carefully to avoid spooking the market, according to S&P Global Ratings. Public Enterprises Minister Pravin Gordhan said on Thursday the government will consult with the power utility’s debt holders on any reorganization and that there isn’t any real concern about haircuts. “Whether you are talking about a haircut or a re-profiling or a restructuring, one has to tread very carefully because…

LONDON (Capital Markets in Africa) – The U.K. economy has been teetering on the edge of the Brexit precipice for several years now. Should it stumble over, the slump that follows could call for a major boost — that’s harder now than it was in 2009. Bloomberg Economics explores ways to extend the runway for monetary policy to land new forms of stimulus, without compromising the Bank of England’s independence. A deep downturn would likely…

NEW YORK (Capital Markets in Africa) – The moment usually comes during Greg Petras’s commute through the rolling hills and cornfields of southern Wisconsin. Somewhere between his home near Madison and the factory he runs on the edge of the small town of Brodhead, the news will turn to the trade wars and Donald Trump will again claim that China is bearing the cost of his tariffs. That’s when Petras loses it. “It’s just an…

LAGOS (Capital Markets in Africa) – Nigeria’s plan to spend less on food by restricting access to dollars for importers could have the opposite effect by threatening food supplies and pushing up prices. President Muhammadu Buhari ordered the central bank on Aug. 13 to stop dollar supply for food imports, saying food security has been achieved and agricultural production has increased. That came after Governor Godwin Emefiele said in July the central bank plans to cut off dairy importers’ access…