The Editorial Team |

Biggest Africa Investor Goes to London for Lonmin Decision

JOHANNESBURG (Capital Markets in Africa) – South Africa’s Public Investment Corp. faces a tough choice: back Sibanye Gold Ltd.’s takeover of Lonmin Plc, and take a hit on its investment, or scupper the deal and risk having to pony up more cash for the platinum miner. When Lonmin shareholder votes are tallied next Tuesday at a meeting in London, the PIC’s 30% stake would be enough to block the acquisition. While the takeover was originally touted as…

AFRICA PREVIEW: Rate Caution to Prevail in Kenya, Ghana, Angola

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LAGOS (Capital Markets in Africa) – Central banks in Kenya and Ghana are likely to keep interest rates on hold next week following in the foot steps of their larger peers in South Africa and Nigeria. Angola’s central bank is also set to leave interest rates alone as it aims to slow inflation even as it lets the currency weaken. Nigeria kept its key rate unchanged at 13.5% on May 21 and the South African…

Kganyago Says Banks Could Handle Potential Eskom Default

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JOHANNESBURG (Capital Markets in Africa) – South Africa’s banking industry would be able to withstand a default by Eskom Holdings SOC Ltd. but the impact on pension funds is a concern for the central bank, Governor Lesetja Kganyago said. The power utility is laden with about $35 billion of debt, roughly equally divided into bonds and loans, according to data compiled by Bloomberg from public records, and is struggling to meet demand for electricity from aging and unreliable plants. “What would…

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

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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…

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