The Editorial Team |

Global Risk Binge Gives Central Bankers Cause to Shudder

LONDON (Capital Markets in Africa) – Global central banks are approaching the end of the year with a collective shudder at the risky behavior that their low interest-rate policies are encouraging. Policymakers from European Central Bank and the Federal Reserve are among those raising cautionary flags at potentially unsafe investing stoked by their efforts to flood economies with ultra-cheap money. Stock indexes from the U.S. to India are at records, and low sovereign bond yields…

Treasury Yields May Trail GDP for Decades in Debt-Trap Fallout

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LONDON (Capital Markets in Africa) – Benchmark Treasury yields have trailed U.S. nominal growth rates for almost a decade — and will continue to do so for at least into the 2040s as the nation’s debt mounts, according to Deutsche Bank AG’s Jim Reid. Fiscal policy will play a bigger role in supporting future growth in the world’s largest economy, entailing more borrowings, and monetary policy would need to keep interest rates capped to help ease…

Never in the History of the Euro Has Volatility Been This Low

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LONDON (Capital Markets in Africa) – It has never been this calm in the euro-dollar options market and it’s starting to look like a structural shift toward persistent low volatility. There were record lows for one- and three-month volatility in the common currency Wednesday, following similar moves in longer tenors at previous sessions. While the expected calm of Christmas holidays may explain the move over the one-month horizon, the trend runs further out and maybe…

African Bank to Add Credit Cards, Overdrafts to Diversify Income

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JOHANNESBURG(Capital Markets in Africa) – African Bank Holdings Ltd. plans to offer overdrafts as the South African lender adds income sources to draw more distance between itself and its collapsed former parent. “We are looking to relaunch our credit-card product next year and we are looking to launch an overdraft product as well,” Chief Executive Officer Basani Maluleke said by phone. “The diversification of our funding is also a critical success factor for the bank.” The lender’s…

Demand Surges at South African Bond Auction Despite Junk Threat

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JOHANNESBURG (Capital Markets in Africa) – Demand at South Africa’s weekly government bond auction surged as investors stocked up on some of the most attractive yields in emerging markets before supply dries up into the year-end. Investors bid for almost four times the amount of securities on offer, making it the strongest sale since the government increased the auction amount to 4.53 billion rand ($306 million) on August 6, according to Bloomberg calculations based on central-bank data. S&P…

Companies Struggle With Late Payments as Kenya Faces Cash Crisis

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NAIROBI (Capital Markets in Africa) – Daniel Mwangi’s construction company in Nairobi is battling to stay afloat and has fired about 1,000 workers in the past year as Kenya’s government struggles to pay contractors. The 36-year-old Nyoro Construction Co., where Mwangi serves as director, is just one of many Kenyan firms that have fallen victim to a funding crisis exacerbated by a weak tax take, rising debt and a public wage bill that eats up more than a third…

Four Ways the U.K. Election Could Play Out for Brexit

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LONDON (Capital Markets in Africa) – It will be no ordinary general election. Voters in Britain are now focusing their minds on the decision they will make in two weeks’ time. The result will determine not just the next government, but the fate of Brexit. From crashing out without a deal to holding another referendum and remaining in the European Union, the range of outcomes is still wide open. Here’s a guide to how it…

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