The Editorial Team |

South Africa’s Credit Risk Falls as Investors Assess Eskom Plan

JOHANNESBURG (Capital Markets in Africa) – A pocket-busting rescue plan for Eskom Holdings SOC Ltd. is better than no plan at all. That seems to be the message from investors after Finance Minister Tito Mboweni on Tuesday unveiled a second multi-billion dollar bailout for the struggling state-owned electricity company. That may force the cash-strapped government to increase borrowing and taxes, putting the nation’s credit rating at risk. Even so, the cost of insuring South Africa’s government debt against default gapped lower…

When Nigerian Bond Yields Are at 14% Nobody Wants Equities

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LAGOS (Capital Markets in Africa) – Nigerian stocks have next to no chance of success when they’re competing for capital against one of the emerging world’s highest bond yields. Weighed down by concern over Nigeria’s economic growth, the prospect of rising bad loans at banks and thinning profit margins, stock inflows have slowed, despite valuations near the cheapest since 2011. That contrasts with the billions pouring into government bonds, which yield 14% on average. Even though Nigerian stocks…

Tullow Reduces Oil-Production Outlook Again on Ghana Faults

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ACCRA (Capital Markets in Africa) – Tullow Oil Plc reduced its 2019 production forecast for the second time in three months as technical glitches in Ghana continued to cast a shadow. Full-year output is now seen at 89,000 to 93,000 barrels of oil a day, reflecting delays in well completion at the African country’s TEN project, Tullow said Wednesday. It’s a further setback for a company that relies on the continent for more than 90% of…

Kenya Central Bank Leaves Benchmark Rate Unchanged at 9%

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NAIROBI (Capital Markets in Africa) – Kenya’s central bank kept its benchmark interest rate unchanged for a sixth consecutive time, saying inflation expectations remain well-anchored. The Monetary Policy Committee held the rate at 9%, Governor Patrick Njorogesaid Wednesday in a statement in the first rates decision since his reappointment for a second term. That was in line with the forecast of all six economists in a Bloomberg survey. Key Insights: The unchanged stance comes even as…

Nigeria Central Bank Holds Key Interest Rate to Fight Inflation

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LAGOS (Capital Markets in Africa) – Nigeria’s central bank kept its benchmark interest rate on hold to battle persistently high inflation even as it seeks to boost lending to grow the economy. The Monetary Policy Committee unanimously decided to hold the rate at 13.5%, Governor Godwin Emefiele told reporters Tuesday in the capital, Abuja. All but one of the six economists in a Bloomberg survey forecast the unchanged stance and one predicted a 50 basis-point cut. Key…

Standard Life and Lloyds Settle $129 Billion Fund Dispute

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LONDON (Capital Markets in Africa) – Lloyds Banking Group Plc and Standard Life Aberdeen Plc have reached a settlement in what was one of the most high-profile disputes in the U.K. fund management industry’s history. Lloyds, which wanted to pull a 104 billion-pound ($129 billion) mandate, will pay the asset manager 140 million pounds in cash as compensation, according to a statement from Standard Life on Wednesday. It will also leave about 35 billion pounds of the total until at…

Facebook to Pay $5 Billion to Settle FTC Privacy Claims

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LONDON (Capital Markets in Africa) – Facebook Inc. agreed to pay a record $5 billion to resolve a U.S. investigation into years of privacy violations, a settlement that increases the board of directors’ responsibility for protecting users’ data while changing little about the company’s lucrative advertising business. The agreement, announced Wednesday by the Federal Trade Commission, will for the first time end Chief Executive Officer Mark Zuckerberg’s final authority over privacy decisions, creating an independent privacy committee…

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