The Editorial Team

The Role of Cryptocurrencies in Investor Portfolios

LAGOS (Capital Markets in Africa) – Cryptocurrencies have attracted widespread interest among private investors and even some hedge funds as a vehicle for speculation. However, institutional investors such as endowment funds, pension funds, and sovereign wealth funds have allocated only small amounts to cryptocurrencies. Their reluctance to invest meaningfully in cryptocurrencies can be traced to a variety of concerns. Cryptocurrencies have displayed significant volatility, they are not backed by a sovereign entity, and their value…

Commodity Outlook: Oil prices to average $64 p/b in 2021

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ICE Brent crude oil front-month prices averaged $65.7 per barrel (p/b) in March 2021, constituting an increase of 5.5% from $62.3 p/b in February 2021 and a rise of 95% from $33.7 p/b in March 2020. The recovery in oil prices was mainly due to improving demand prospects amid the rollout of the COVID-19 vaccine world-wide, as well as to supply discipline from the recurrent OPEC and non-OPEC output cuts, and to lower oil production…

Africa: Real GDP to grow by 3.4% in 2021, outlook subject to elevated uncertainties

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LAGOS (Capital Markets in Africa) – The African Development Bank Group (AfDB) projected Africa’s real GDP to grow by 3.4% in 2021, after contracting by 2.1% in2020 due to the fallout from the coronavirus pandemic. It attributed the region’s economic recovery to the easing of pandemic related restrictions, the anticipated resumption of tourism activity, and the increase in commodity prices. It noted that the economic impact of the pandemic varies across economic groupings and sub-regions,…

Outlook April Cryptos – Bitcoin Taking the Gold

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LAGOS (Capital Markets in Africa): The adage that money flows to where it’s treated best describes what we see as firming underpinnings for the price of Bitcoin. It’s not necessarily bearish for gold, which is backing into layers of support below $1,700 an ounce, but most indicators show a shifting global tide that favors the nascent digital currency as a reserve asset. 1. Digital vs. Analog: Bitcoin’s Upper Hand Bitcoin’s relationship to gold is similar…

Biden Tax Plan Seen Hitting Tech, Pharmaceutical Companies

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LAGOS (Capital Markets in Africa) — The tax plan President Joe Biden laid out last week will likely hit technology and pharmaceutical companies particularly hard, although the challenge for legislators will be to minimize loopholes that could diminish the impact, tax experts said. Much of the most valuable assets at pharmaceutical and tech companies is intellectual property, like patents and algorithms — intangibles that make it easier for them to structure global operations in a…

Oil Rebounds Amid Broad Commodities Rally Ahead of Iran Talks

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LAGOS (Capital Markets in Africa) — Oil rebounded, mirroring a broader rally in commodities, ahead of talks on reviving the Iranian nuclear accord. West Texas Intermediate rose 2.3%, with most other commodities also climbing. Crude had plunged on Monday amid a resurgence in Covid infections in Europe and an imminent increase in OPEC+ supplies, which could swell further with an agreement with Iran. Multiparty negotiations take place in Vienna later on Tuesday, though the chances of a breakthrough are seen by analysts…

Why Nigeria Exchange Rate Policy Is Such a Minefield: QuickTake

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LAGOS (Capital Markets in Africa) — Navigating Nigeria’s foreign exchange rate policy is tricky. There are multiple exchange rates; officials issue confusing and contradictory statements; promised reforms don’t materialize; and the central bank and finance ministry don’t always appear to see eye-to-eye on how to manage the naira. Economic fallout from the pandemic, including a deterioration in state finances, has made the need for clarity all the more pressing. 1. Why does Nigeria have multiple…

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