The Editorial Team |

Africa’s No. 1 Bank Says Lonmin Investors Should Reject Offer

JOHANNESBURG (Capital Markets in Africa) – Africa’s biggest bank said Lonmin Plc investors should reject Sibanye Gold Ltd.’s takeover offer as it undervalues the platinum miner’s assets by as much as 6.64 billion rand ($460 million). While Sibanye’s offer equates to 11.60 rand a share, Lonmin’s value at current metal prices is 45% higher, Leroy Mnguni, an analyst at SBG Securities, a unit of Standard Bank Group Ltd., said in a note to clients. If assets such as the platinum producer’s…

Zimbabwe’s Currency Fix Is Failing: It Has Too Few Dollars (

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HARARE (Capital Markets in Africa) – Zimbabwe’s attempt to close a wide gap between its official and black-market exchange rates appears to be failing. The southern African nation effectively devalued its currency, known as RTGS$, in February when it ended a peg to the U.S. dollar and allowed it to trade on an interbank market. That was to try to end dire shortages of fuel, medicine and other imported goods. It hasn’t worked out as planned: the…

Egypt Central Bank Keeps Rates Unchanged Before Subsidy Cuts

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CAIRO (Capital Markets in Africa) – Egypt’s central bank left interest rates unchanged for a second meeting on Thursday as it faces a potential resurgence in inflationary pressures from a fresh wave of subsidy cuts. The Monetary Policy Committee kept the overnight deposit rate at 15.75% and the lending rate at 16.75% — a decision predicted by all but one of 11 economists surveyed by Bloomberg. Cairo-based investment bank EFG Hermes has said the pause may extend…

Moody’s Cuts Zambia Deeper Into Junk on Higher Default Risk

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LUSAKA (Capital Markets in Africa) – Moody’s Investors Service has cut its assessment of Zambia’s debt deep into junk territory citing a rising probability of default. Moody’s downgraded the southern African nation’s long-term foreign-debt rating to Caa2 — the fourth-lowest junk assessment — from Caa1 and reduced the outlook to negative, it said in an emailed statement Thursday. The higher risk of a default “reflects increasing credit challenges stemming from rising debt levels,” exacerbated by…

Investors Have a Wish List as Ramaphosa Picks His Ministers

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JOHANNESBURG (Capital Markets in Africa) – South African equity investors got the election result they wanted, more or less. Now they’re hoping President Cyril Ramaphosa will follow up by choosing a team of competent ministers that’s lean and free of the taint of scandal. Ramaphosa is expected to announce his cabinet within the next few days and the early signs have encouraged investors: former Environment Minister Nomvula Mokonyane, accused of taking bribes, has already been ruled out. The…

Old Mutual Suspends CEO Moyo Over `Breakdown in Trust’

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JOHANNESBURG (Capital Markets in Africa) – Old Mutual Ltd. suspended Chief Executive Officer Peter Moyo over what its directors called a “material breakdown in trust and confidence.” The insurer’s board, chaired by former Finance Minister Trevor Manuel, made the announcement hours before the 174-year-old company’s annual meeting with shareholders in Johannesburg without disclosing anything about alleged misbehavior. Chief Operating Officer Iain Williamson will serve as acting CEO. In a letter to shareholders, the company said the dispute stemmed…

Secrecy, Suspicion and Stumbles Catch Up With Theresa May

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LONDON (Capital Markets in Africa) – The British prime minister’s alienation of her party, parliament and European leaders put her on the wrong road to Brexit deliverance Theresa May was dealt a poor hand when she became prime minister, and proceeded to play it very badly. Perhaps no leader in 2016 could have satisfied British expectations of Brexit. Advocates of leaving the European Union had made many promises about the benefits, and been deliberately vague on the details. But…

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