The Analyst | - Part 2

African Sovereign Eurobond August 2015 Review: Yield widening due to falling commodity prices

Lagos, Nigeria, Capital Markets in Africa — A remarkable feature in Fixed Income markets this year has been the widening in African sovereign Eurobond yields. This weakening is in part due to the expected rise in US bond yields and fallen commodity prices (as most African countries are commodities dependent) as well as the anticipated decline in global growth due to China economic downturn. Since January 2015 yields on Zambia’s 2022 and Zambia’s 2024 Eurobond have…

Diversification of the economy requires a consistent policy — Abraao Gourgel

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LUANDA, Angola, Capital Markets in Africa — The Minister for the Economy of Angola, Abraão Gourgel, spoke during the panel discussion on Transformation and the Diversification of the Economy, the Angolan Experience. According to Mr. Gourgel, the process of diversification of the Angolan economy is based on five main objectives including establishing support for emerging businesses. To achieve this objective the Guiché Único (One-Stop) system was created, reducing the costs of formalising business ventures by 90 per cent….

African Equity Market August 2015 Report: Most Exchanges sag for both local and foreign investors, Egypt bled most …

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Lagos, Nigeria (Capital Markets in Africa):- African stock markets performance measured by country equity benchmark index return ended in negative for the month of August, with all indices closed in red zone for both local currency and dollar return basis. Still on local basis return, the August average return of -2.9 percent was recorded across eighteen African equity indices and August monthly returns ranges from -11.5 percent recorded by the Egyptian Exchange equity markets (measured by EGX 30 index) to -0.2 percent registered…

Nigeria: Headline Inflation Remains Unchanged In July

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Lagos, Nigeria (Capital Markets in Africa) — The National Bureau of Statistics (NBS) released the Consumer Price Index (CPI) report for July today. Headline Inflation for July – measured Year-on-Year (Y-o-Y) – was estimated at 9.2%, unchanged from the rate reported in the Month of June; thus halting a seven consecutive monthly rise in price level since December 2014. According to the NBS report, inflation rate in July was unchanged due to muted rises in…

African Equity Market July 2015 Report: BRVM rewards local investors, Botswana strengthens foreigners capital

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Lagos, Nigeria, Capital Markets in Africa — African stock market performance measured by country equity benchmark index return ended in negative for the month of July, with eight gainers and 10 losers on local currency basis. The July average return of -1.5 percent was recorded across eighteen African equity indices and July monthly returns ranges from -9.8% registered by the Nigeria equity markets (measured by NSE All Share) to 8.2% recorded by Cote d’Ivoire equity market (measured…

What expert says: Nigerian naira overvalued or undervalued?

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Johannesburg, South Africa (Capital Markets in Africa) — The interbank rate was seemingly unmoved at USD/NGN197 in 2Q15, masking the intense backlog of US dollar demand. It is difficult to discern whether domestic liquidity conditions have improved since the election. The MPC’s rhetoric regarding the imbalance in the domestic foreign exchange market continues to favour exchange controls to restrict excess US dollar demand. Partial dollarisation and bouts of speculative activity are believed to have aggravated…

Nigerian currency is overvalued says Africa Economist, John Ashbourne

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LONDON (Capital Markets in Africa) — I would say that the currency remains overvalued. Nigeria’s balance of payments position has changed quite radically since the price of oil fell so sharply, and the currency has yet to fully adjust to this. Given low oil prices, relatively high inflation, and generalised dollar strength we would have expected that the naira would have weakened over the course of the second quarter. Indeed, almost every other SSA currency…

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