The Editorial Team |

Zambia Heads for Showdown With Bondholders as Default Looms (2)

LUSAKA (Capital Markets in Africa) — The clock is ticking for Zambia to convince reluctant bondholders to accept an interest-payment holiday while it works out a debt-restructuring strategy. If investors refuse Zambia’s request for a six-month standstill in a key vote on Tuesday, it may become the first African nation to default since the onset of the coronavirus. That could set a precedent for how cash-strapped governments treat private and Chinese creditors. The southern African…

Wall Street Set for First $100 Billion Trading Year in a Decade

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NEW YORK (Bloomberg) — Working from home hasn’t slowed down Wall Street’s trading desks. The five biggest U.S. investment banks are on pace for their first $100 billion years for trading revenue in more than a decade. In just three quarters, they’ve already generated almost $84 billion, more than any full year since 2010. Sell-side traders rode a wave of activity as markets plunged at the start of pandemic-spurred lockdowns before embarking on dramatic rebounds….

Investors Clamor for Risky Junk Debt Amid Pandemic Flare-Ups

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LAGOS (Capital Markets in Africa) — Bond investors are pouring money back into riskier debt in search of higher returns as Covid-19 flare-ups and clampdowns have money managers bracing for interest rates to remain low for a long time. Five of the six U.S. junk bonds that companies sold on Wednesday were increased in size to accommodate heavy demand, and yields ended up being lower than initially targeted on the deals. In the secondary market, notes…

Kenya Economy Shrinks for First Time in 12 Years on Covid-19 (2)

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NAIROBI (Capital Markets in Africa) — Kenya’s economy contracted for the first time in almost 12 years in the second quarter as the impact of the coronavirus pandemic battered key sectors. Gross domestic product fell 5.7%, compared with growth of 4.9% in the three months through March and expansion of 5.3% in the same period a year earlier, the Kenya National Bureau of Statistics said Thursday on its website. The median of six economists’ estimates…

WTO Finalist Wants Body to Confront Issues to Level Trade Field

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LAGOS (Capital Markets in Africa) — One of two candidates to lead the World Trade Organization said she wants the body to overcome its problems so that it can create a level playing field for international commerce and see a return to a multilateral system. “Let us get back to a multilateral system. Let’s strengthen that — that is what will serve the world and let’s do less of the bilateral spats that we see,”…

Nigeria’s Fixed-Income Investors See Inflation Eroding Returns

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LAGOS(Capital Markets in Africa) — Local investors are piling into Nigeria’s short-term debt even though rising inflation means that they are reaping negative real returns. Prices increases in Africa’s largest economy accelerated for a 13th straight month in September, according to data released by the statistics agency on Thursday. Even so, rates on Treasury Bills slipped to the lowest levels seen in more than 10 years at an auction on Wednesday. The one-year bill sold…

Libor Exit Race for Derivatives Awaits ‘Starting Pistol’

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LONDON (Capital Markets in Africa) — The global derivatives market looks set to accelerate its exit from Libor with the impending release of standardized contractual terms designed to ease the transition to new rates. The International Swaps and Derivatives Association, the trade group for the industry, will publish its hotly anticipated Libor protocol on Oct. 23 after receiving approval from the U.S. Department of Justice, ISDA said in a statement on Friday. The publication “will effectively fire…

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