The Markets

LAGOS (Capital Markets in Africa) – Forget Iran and OPEC — there’s another issue that will keep oil prices supported for the next two years, according to Morgan Stanley. Brent crude will reach $90 a barrel by 2020 as new international shipping regulations take effect, overhauling the types of fuels produced by refiners, the bank’s analysts said in a report. The changes, which force vessels to consume lower sulphur fuels beginning in January of that…

LAGOS (Capital Markets in Africa) – Some African countries are overpaying for dollar bonds, raising concern about debt-service costs at a time when currencies are weakening against the greenback, according to the African Development Bank. High-interest rates make the continent’s bonds attractive to investors despite questions about the true extent of the debt loads of countries such as Zambia and the Republic of Congo. “Raising a 30-year bond at a yield of 950 basis points — that’s…

LAGOS (Capital Markets in Africa) – Oil prices could rally to $100 a barrel next year, a level not seen since 2014, as supply risks in Venezuela and Iran strain global markets, according to Bank of America Corp. Brent futures, trading near $77 on Thursday, are set to reach $90 in the second quarter of 2019 as world inventories shrink, the bank said. As that view hinges on OPEC reviving output and a limited impact on…

LAGOS (Capital Markets in Africa) – European oil refiners and trading houses began preparing to cut purchases of Iranian crude after Washington imposed harsher sanctions on shipments from Tehran than many in the energy industry had expected. The Trump administration has given buyers 180 days to wind down imports after pulling out of a landmark nuclear deal with world powers. Many of the traders and refiners who spoke to Bloomberg anticipate they’ll have to curb purchases…

JOHANNESBURG (Capital Markets in Africa) – Randgold Resources Ltd. fell the most in 18 months in London after a series of setbacks across its African mines hit both earnings and gold production. A labor dispute at its Tongon mine in Ivory Coast means the operation is unlikely to hit its full-year target, the miner said Thursday. Randgold’s new gold mine in the Democratic Republic of Congo faces uncertainty as the company joins other producers trying…

CAIRO (Capital Markets in Africa) – Not all emerging-market debt is losing its allure as U.S. Treasury yields rise. At least not for Morgan Stanley Investment Management’s Michael Kushma. Far from taking a more skeptical view of the asset class, Kushma, who helps oversee $80 billion in debt, says the trick is to seek securities in places where there’s relatively low interest-rate risk. It’s a strategy that leads him to talk enthusiastically of countries that…