The Editorial Team |

PSG Weighs Spinoff of Best-Performing S. African Bank Stock

JOHANNESBURG (Capital Markets in Africa) — PSG Group Ltd. is weighing a spinoff of Capitec Bank Holdings Ltd., the best-performing South African banking stock since its listing in 2002, to unlock more value from its investments. All or part of PSG’s 30.7% stake in Capitec might be distributed to its investors, the company said in a statement on Wednesday. “The unbundling should be positive for PSG and result in a further decrease in the discount to net asset value,”…

Safaricom Profit Jumps Ahead of Looming Pain From Coronavirus

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NAIROBI (Capital Markets in Africa) — Safaricom Plc said full-year earnings jumped by 18% as East Africa’s biggest company reported growth in mobile money and data sales ahead of the onset of the coronavirus pandemic. Net income was 73.7 billion shillings ($696 million) in the 12 months through March, beating a median analyst estimate of 69.7 billion shillings, the Nairobi-based company said in a statement on Wednesday. Service revenue increased by 4.8%. The arrival of…

South Africa Economy Contracting 6.4%, Land Bank Saved, Says Mboweni

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JOHANNESBURG (Capital Markets in Africa) — South African Finance Minister Tito Mboweni said the South African economy could contract as much as 6.4% this year due to the coronavirus outbreak and the budget deficit could swell to more than 10% of gross domestic product. In a recording of a conference call with clients of Goldman Sachs Group Inc., Mboweni said he expected the contraction to be deeper than the 5.8% forecast by the International Monetary Fund,…

Even at $10 a Barrel, Oil Traders Balk at Buying Nigeria’s Crude

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LAGOS (Capital Markets in Africa) — The oil price crash isn’t getting any easier for Nigeria. Late on Monday, the nation released the prices for most of its crude oil grades for sale in May. The figures reflect an urgent need to offload cargoes in what is a highly competitive marketplace. Even so, traders cautioned that the prices — $10 a barrel or less if the market doesn’t improve — still may not tempt enough buyers because…

Africa: Sustained capital outflows to weigh on banking sectors in 2020

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LAGOS (Capital Markets in Africa) – Moody’s Investors Service indicated that a prolonged period of capital outflows from emerging markets (EMs) will have an adverse impact on the foreign-currency liquidity, asset quality, and profitability of African banks in 2020. It said that the banking sectors of Angola and the Democratic Republic of the Congo are the most exposed to capital outflows, given their high dollarization rates, as well as to the elevated reliance of the…

Private equity fundraising up 12% to $133bn in first quarter of 2020

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LAGOS (Capital Markets in Africa) – Research provider Preqin indicated that 267 private equity (PE) funds raised a total of $133bn in capital commitments worldwide in the first quarter of 2020, compared to 395 PE funds that secured $188.3bn in the fourth quarter of 2019 and to 366 PE funds that raised $118.6bn in the first quarter of 2019. It noted that the outbreak of the coronavirus had a limited impact on global PE fundraising,…

Banking: Pressure on Currency Intensifies, Banks Earnings Decline

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Lagos (Capital Markets in Africa) – Citi Research indicated that the pressure on the naira intensified in early March 2020 following the sharp decline in global oil prices. It noted that the Central Bank of Nigeria (CBN) devaluated on March 20 the official exchange rate from NGN306.5 per US dollar to NGN360.5 against the dollar. It added that the exchange rate on the NAFEX market weakened from about NGN365 per dollar in late February to…

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