The Editorial Team |

Higher Debt Costs Cut South Africa Fiscal Room, Moody’s Says

JOHANNESBURG (Capital Markets in Africa) – The weaker rand and foreign-investment outflows from South Africa are raising the nation’s debt costs and reducing its fiscal flexibility, but its vulnerability to tightening financing conditions is still low, Moody’s Investors Service said. The rand depreciated 14 percent against the dollar in the second quarter, the worst performance among major currencies after Brazil’s real, while portfolio outflows totaled about $6.4 billion, Moody’s said in an emailed report Tuesday, citing data…

South African Central Bank Is Said to Call for Capitec Fee Probe

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JOHANNESBURG (Capital Markets in Africa) – South Africa’s central bank asked the country’s credit regulator to probe whether Capitec Bank Holdings Ltd. re-introduced a product criticized for its fee structure, an investigation that is ongoing, according to a person familiar with the matter. The referral to the National Credit Regulator came after the issue about the so-called multi-loan product was raised in a report by short-seller Viceroy Research in January, said the person, asking not to be…

Steinhoff Is Said to Gauge Interest in European Retailer Pepco

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JOHANNESBURG (Capital Markets in Africa) – Steinhoff International Holdings NV is gauging takeover interest in businesses including clothing chain Pepco as the scandal-hit retailer prepares for the next phase of a recovery plan, according to two people familiar with the matter. The South African company has informally sounded out potential buyers for Pepco including private equity firms, said the people, who asked not to be identified as the plans aren’t public. The profitable chain, with more…

Kenya Fund Managers Warn New Transaction Tax May Curb Investment

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NAIROBI (Capital Markets in Africa) – Kenyan fund managers slammed a new tax on financial transactions, saying it risks inhibiting trading and reducing the country’s attractiveness to investors. Forcing the government to rethink the levy would curb the revenue it needs to implement President Uhuru Kenyatta’s Big Four agenda — a development program that seeks to boost agriculture, manufacturing, healthcare and home construction. The tax is one of a raft of levies announced by Treasury Secretary Henry…

Trump Piles Pressure on Saudis Flummoxed by Higher Oil PricE

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LAGOS (Capital Markets in Africa) – If the world’s biggest crude exporter says it’s going to ramp up production, prices usually drop. But as Saudi Arabia adds barrels before its customers get burned, prices have jumped. And Donald Trump isn’t happy. The U.S. president tweeted on Saturday that the Saudi king had agreed to raise production to cut the cost of oil for consumers. While the White House later back pedaled from his assertion, Trump on Sunday…

Kenyan Treasury Considering Selling Bonds by Private Placement

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NAIROBI (Capital Markets in Africa) – Kenya’s Finance Ministry is considering offering debt through a private placement. The Treasury invited fund managers and insurers to a July 6 meeting for a “market-sounding exercise,” according to a June 29 letter signed by Daniel Ndolo, director of debt policy strategy and risk management. Participants will “discuss and agree on the schedule of activities towards the issuance” of bonds by private placement along with pricing methodology, according to…

IMF Says Senegal’s Economic Risks Increased, Remain Manageable

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DAKAR (Capital Markets in Africa) – While risks to Senegal’s economy have increased, they remain manageable, the Washington-based International Monetary Fund said. “Lack of progress on structural fiscal issues such as revenue mobilization, energy subsidies, and reforms to further reduce the treasury’s additional financing needs could undermine fiscal sustainability,” the lender said Monday in an emailed statement. “On the external side, security risks in the region could adversely affect investment and growth.” The West African nation’s economy…

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