The Editorial Team |

Fed’s Three Reasons for Cutting in July Support Another Move

NEW YORK (Capital Markets in AfricaA) – Federal Reserve officials viewed their interest-rate cut last month as insurance against headwinds from the trade war and low inflation — reasons that look even sharper as they move toward their meeting in September. Minutes of the Federal Open Market Committee’s July 30-31 meeting released Wednesday in Washington laid out the reasons for the quarter percentage-point cut, highlighting risks to the outlook even though the U.S. economy, for…

Zimbabwe’s Rulers Find Themselves in a Trap of Their Own Making

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HARARE (Capital Markets in Africa) – Zimbabwe’s rulers are finding that two decades of economic mismanagement and brutal repression have led them into a trap from which there’s little chance of escape. If they implement the political and democratic reforms needed to win the financial support the economy needs from international donors, they’re likely to lose the next election. If they don’t, their people, propelled by the extreme hardship brought about by austerity measures imposed…

Ghana’s Shutdown of Second-Tier Lenders Seen Risking 4,000 Jobs

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ACCRA (Capital Markets in Africa) – The central bank announced last week it had revoked the licenses of savings and loans companies as well as finance houses and appointed a receiver to manage their affairs. The steps marked the end of an industry cleanse of lenders and second-level financial institutions that started in August 2017 and cost the government at least 12 billion cedis ($2.2 billion) in bonds and cash to cover depositors’ holdings. The…

Seriti Resources Is Said to Win Bid for South32 Coal Assets

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JOHANNESBURG (Capital Markets in Africa) – Seriti Resources, a South African mining company, won a bid to acquire South32 Ltd.’s thermal-coal assets in the country, according to two people familiar with the process. Final offers were in a range of $300 million to $350 million, according to one of the people, who asked not to be identified because the information isn’t public. South32 started a search last year for buyers of its South Africa Energy Coal…

IMF Rumors May Be the Scare That South Africa Needs for Action

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JOHANNESBURG (Capital Markets in Africa) – The threat of an International Monetary Fund bailout, unthinkable a few years ago, may force South Africa’s government to push through the reforms it needs to rescue the economy. An expanded bailout for struggling power utility Eskom Holdings SOC Ltd. and calls from other state companies for support have strained the nation’s budget, prompting business groups and analysts to warn the country could be pressed to ask the IMF to help…

Yields Rush to Rescue of One of World’s Worst Stock Markets

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LAGOS (Capital Markets in Africa) – Nigerian stocks may be among this year’s worst performers, but that’s at least boosting the appeal of their yields. The benchmark index in Africa’s biggest oil producer has fallen 14% this year, making it the fourth-worst among 94 major bourses tracked by Bloomberg. The slump underscores foreign investors’ frustration over a lack of policy progress since President Muhammadu Buhari won re-election in February. Despite the gloomy picture, a global abundance of…

Shoprite Sees Persistent Woes Outside South African Market

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JOHANNESBURG (Capital Markets in Africa) – Shoprite Holdings Ltd. will look to cut costs outside its home market as Africa’s largest food retailer battles currency shortages and stricter regulation in several countries. The owner of supermarket chains such as Checkers and U-Save has been growing in 14 territories outside South Africa to become a continent-wide superpower, but factors such as inflation — particularly in Angola — have hampered progress. That contributed to a 20% decline in…

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