Market Watch

JOHANNESBURG (Capital Markets in Africa) – As risk aversion weighed on developing-nation bonds in October, one small corner of the market resisted: sub-investment-rated corporate debt in Africa. Emerging-market corporate bonds lost an average 0.7 percent this month, according to Bloomberg Barclays indexes. But dollar-denominated securities of companies in Ghana, Democratic Republic of Congo and Nigeria eked out gains, thanks to the relative isolation of those markets and the general scarcity of corporate debt in Africa. African…

JOHANNESBURG (Capital Markets in Africa) – South Africa’s yield curve has steepened to a record as investors protect themselves against a riskier fiscal outlook. The government said its finances were deteriorating last week, driving the premium on 20-year yields over two-year securities to more than 365 basis points on Wednesday, the most since Bloomberg started compiling the data in 2003. Longer-dated bonds will remain undervalued, according to Standard Bank Group Ltd. “While we still expect the yield…

JOHANNESBURG (Capital Markets in Africa) – South Africa’s rand headed for an advance Thursday for the first time this week after data showed the country’s current-account deficit — a major vulnerability amid the emerging-market sell-off — narrowing from a two-year high. But it’s not only the slight improvement in economic fundamentals and global risk appetite that’s supporting a rand rebound. Technical indicators suggest South Africa’s currency is due for a correction after slumping to a two-year low this week….

ACCRA (Capital Markets in Africa) – Accra’s share market is poised for a massive boost in liquidity Wednesday when shares start trading in MTN Group Ltd.’s local unit. While MTN sold only about a third of the shares available in the initial public offering, the 1.1 billion cedis ($238 million) raised is still more than three times larger than the next biggest Ghana IPO. The sale attracted thousands of individual investors and vastly increases the…

LAGOS (Capital Markets in Africa) Investors set to bag the best returns in five years from emerging-market bonds this year should brace themselves for 2018. Political risk looms large. Countries that make up more than 50 percent of a Bloomberg Barclays developing-nation local bond index are gearing up for elections in the next 12 months. While the outcomes of votes in countries like Russia are predictable, tight contests in heavyweights like Brazil and Mexico have potential to…