The Editorial Team |

Negative `Jaws’ Bite South African Banks Battling to Stem Costs

JOHANNESBURG (Capital Markets in Africa) – The bottom line is that the top line stinks. That’s the challenge facing South Africa’s biggest banks as they fight to contain costs that are accelerating faster than revenue. The reasons are pretty much the same: South Africa’s economy hasn’t expanded at more than 2 percent a year since 2013 and unemployment is at 27 percent. In addition, consumers are being battered by rising taxes, fuel prices, and higher utility bills. Companies, meanwhile,…

Group Five Collapse Signals South African Construction Demise

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JOHANNESBURG (Capital Markets in Africa) – South Africa’s construction industry is being demolished. After 45 years of trading on Johannesburg’s stock exchange, Group Five Ltd.’s stock was suspended Tuesday after the company filed for bankruptcy protection, making it the fifth local builder to enter business rescue in less than a year. From a peak market value of 8.2 billion rand ($575 million) in 2007, it was worth less than 100 million rand when the shares stopped…

Love of Yield Beats Supply Concern Amid African Bond Bonanza

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LAGOS (Capital Markets in Africa) – The dollar-bond market remains unruffled by what could become a torrent of new-bond sales from African governments: the yields are far too attractive to worry about excess supply for now. A measure of African sovereign dollar-bond yields headed for the biggest two-day drop in a month even as governments from South Africa to Ghana were testing the water for potential bond sales. Still, the gauge hovered above its 10-year average, acting as a…

Macron Tours Africa as Latest French Leader Getting Bogged Down

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PARIS (Capital Markets in Africa) – Past French presidents have arrived in office promising to move France’s African policy beyond its focus on propping up former colonies. Each one has gotten dragged back in. Emmanuel Macron’s three-day trip to Africa this week is meant to boost trade with Ethiopia and Kenya, two countries that were never controlled by France. Still, the trip takes place against a backdrop of deepening French military involvement across West Africa,…

Ghana’s $3 Billion Eurobond Foray Comes at a Tricky Time

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ACCRA (Capital Markets in Africa) – Ghanaian officials are preparing to meet fixed-income investors in the U.S. and London this week as they look to issue a $3 billion Eurobond. It could be a tough sales pitch. An offering from the West African nation’s government may well be imminent, but only if officials are satisfied with the price that traders demand. That’s a big if, given Ghana’s battle with the world’s weakest currency this year, and concerns…

Dirty Money Finds Home in U.K. as Regulators Fail, FCA Says

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LONDON (Capital Markets in Africa) – U.K. organizations supervising accountants are too worried about pleasing their membership to live up to their duty to crack down on money laundering, setting back attempts to rid the country of billions of pounds of dirty money, according to a new report. Some of the U.K.’s 22 groups overseeing accountants and lawyers did no anti-money laundering supervision whatsoever, the Office for Professional Body Anti-money Laundering Supervision said in its…

Pound Slides as Optimism on May’s Revised Brexit Deal Fizzles

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LONDON (Capital Markets in Africa) – The pound slid in a swift turn of fortunes on speculation that a revised Brexit deal negotiated overnight won’t pass Parliament. Sterling fell more than 1 percent after U.K. Attorney General Geoffrey Cox said that legal risks remained over the Irish backstop, damping the prospect of Prime Minister Theresa May garnering enough support from lawmakers in a vote Tuesday. U.K. government bonds erased an earlier decline. “Sterling has been knocked back on the news that…

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