The Editorial Team |

South Africa Unexpectedly Tips Into Second Recession in 8 Years

JOHANNESBURG (Capital Markets in Africa) – South Africa’s economy fell into a recession for the first time since 2009 after it contracted for a second straight quarter in the first three months of the year as all bar two industries shrank. Gross domestic product receded an annualized 0.7 percent in the first quarter from a contraction of 0.3 percent in the previous three months, Statistics South Africa said in a report released on Tuesday in the capital,…

South Africa Gets S&P Reprieve as Local Debt Averts Junk

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JOHANNESBURG (Capital Markets in Africa) – S&P Global Ratings left its assessment of South Africa’s foreign-currency debt at the highest junk level and its rand bonds at the lowest investment grade, granting the country a reprieve after a downgrade in April. The foreign-currency rating was affirmed at BB+, S&P said in a statement Friday. The assessment on rand debt, which comprises about 90 percent of the country’s portfolio, was maintained at BBB-. The outlook on both…

Barclays Africa Purchase Said to Spur PIC Into Selling Sappi

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JOHANNESBURG (Capital Markets in Africa) – The Public Investment Corp. sold a stake in Sappi Ltd., the world’s biggest maker of dissolving wood pulp, to help fund its purchase of shares in Barclays Africa Group Ltd., according to a person familiar with the matter. Africa’s biggest money manager has also sold shares in other companies to help it finance the Barclays Africa stake acquisition, said the person, who asked not to be named because the transactions are still confidential….

Nigerian Banks Outstrip Peers on Returning Dollar, Old Mutual Up

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LAGOS (Capital Markets in Africa) – Since the Nigerian central bank eased a dollar shortage by opening a currency-trading window for foreign investors in April, lenders in Africa’s biggest economy have soared. The local banking index is up 35 percent this quarter, outstripping South Africa’s equivalent stock gauge and MSCI’s emerging-market financials index. Even after the jump, Guaranty Trust Bank is the sole Nigerian lender in the index to trade above its book value, while none of…

South Africa Avoids a Second Fitch Cut as Rating Affirmed

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JOHANNESBURG (Capital Markets in Africa) – South Africa avoided a second downgrade in two months from Fitch Ratings Ltd. as the company left its assessment of the nation’s debt at the highest non-investment grade. The local- and foreign-currency ratings were affirmed at BB+, Fitch said in an emailed statement Thursday. The outlook on both assessments was kept at stable. Fitch and S&P Global Ratings cut their assessments of South Africa’s foreign-currency debt to the highest junk level in…

Nigerian stocks rise to 11-month high on banking, cement shares

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LAGOS (Capital Markets in Africa) – Nigeria stocks jumped to a 11-month high on Thursday, driven by gains in banking and cement shares as investors took advantage of the low valuation for some commercial bank shares. The stock market index rose 2.37 percent to cross 30,197 points, lifted by gains in First Bank Holdings and Dangote Cement. The banking index rose 1.61 percent amid expectations Africa’s biggest economy would exit recession soon as higher oil revenues…

OPEC Can Still Do What It Takes to Prop Up Oil: Robin Mills

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LAGOS (Capital Markets in Africa) – The cartel needs to make deeper reductions or a long-term commitment to higher output. “We’re going to do what it takes,” Khalid Al-Falih, Saudi Arabia’s energy minister, said in March. But by agreeing to an unexciting extension of cuts on May 25, the Organization of Petroleum Exporting Countries is merely tinkering. Unless the group acts decisively, it faces a slow process of attrition in rebalancing the market. But it…

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