The Editorial Team |

Recession Reignites South Africa Credit-Rating Downgrade Concern

JOHANNESBURG (Capital Markets in Africa) – South Africa’s unexpected slump into a second recession in almost a decade has boosted fears of another round of credit-rating downgrades that could see a sell-off in local-currency bonds. The cost of insuring the country’s debt against default for five years using credit-default swaps spiked to the highest since November 2016 while yields on the government’s benchmark local-currency bonds due in December 2026 rose to a nine-month high. The rand weakened the most against the…

South African Rand Gets Cornered in a One-Way Bet as Rate Hike Seen Unlikely

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JOHANNESBURG (Capital Markets in Africa) – One of the biggest differences between central banks in South Africa and Turkey is credibility, according to S&P Global Ratings. But as the rand tumbles to a two-year low amid a broad emerging-market sell-off, that strength is becoming a problem for the currency. The South African Reserve Bank’s policy of targeting inflation and leaving the rand to the markets is making it something of a one-way bet at a time…

South Africa Says U.S. Doesn’t Link AGOA Access to Land Plan

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JOHANNESBURG (Capital Markets in Africa) – U.S. officials have made no link between South Africa’s plan to expropriate land without compensation and the country’s access to trade benefits under the African Growth and Opportunity Act, Trade and Industry Minister Rob Davies said. One of the conditions for being eligible for AGOA, which favours 39 African nations by eliminating import levies on more than 7,000 products, is the protection of private property rights. Trade union Solidarity has warned…

China, Kenya Sign Infrastructure Accords During Beijing Meeting

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NAIROBI (Capital Markets in Africa) – Chinese companies will construct three main roads in Kenya through public-private partnerships under the East African nation government’s roads-annuity program. The unidentified companies will build a 30-kilometer (18-mile) expressway from the nation’s biggest airport in the capital, Nairobi, to the city’s Westlands suburb, Kenyan President Uhuru Kenyatta’s office said Tuesday in an emailed statement. Other projects include two roads in the north-eastern Kenya that will cost 15 billion shillings ($149…

Egypt Said to Choose Citi, JP Morgan for Oil Price Hedging Plan

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CAIRO (Capital Markets in Africa) – Egypt has selected Citigroup Inc. and JP Morgan Chase & Co. to hedge against fluctuations in global oil prices, two Egyptian officials said. Egypt announced several weeks ago that it was seeking to protect itself against sudden increases in the price of crude oil and was negotiating with global banks. It expects to begin hedging at the end of this year or early in 2019, the officials said, speaking on condition of…

Contagion or Not, These Emerging Markets Hold Key to Selloff

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LAGOS (Capital Markets in Africa) – This year’s global emerging-market selloff has its roots in a slew of mini-roots as the era of easy-money came to an end. Consider Turkey, now paying the price for its refusal to follow orthodox monetary policy; Argentina, facing a crisis of confidence just four years of its last default; China, targeted in a trade war; and South Africa, the emerging-market proxy punished for crisis in any corner of the asset class….

South Sudanese Vow to Stop Running as Peace Deal Calms Guns

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SOUTH SUDAN (Capital Markets in Africa) – Gunshots and screams rang out as Rosemary Keji fled her village almost two years ago, one of millions of South Sudanese escaping civil war. After finally returning last month, she’s planting potatoes beside her wrecked house in Yei River state and vowing never to leave again. The 28-year-old mother of two is one of a steady trickle of refugees coming back from neighbouring countries after August’s preliminary deal to end…

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