The Markets

JOHANNESBURG (Capital Markets in Africa) – South Africa’s stock market is witnessing a paradox: foreign investors are selling in the local market but buying a U.S. exchange-traded fund that invests in the shares at the fastest pace in 11 years. On the Johannesburg exchange, foreigners sold a net 14.6 billion rand ($1.1 billion) of shares in January with 19 of the 22 trading days seeing outflows, according to JSE Ltd. During the same period, investors in NYSE…

JOHANNESBURG (Capital Markets in Africa) – There’s been enough bad news about South Africa’s state-owned electricity company in recent months to rattle the hardiest bond investor. Or so you’d think. Even before President Cyril Ramaphosa said on Tuesday the nation won’t allow Eskom Holdings SOC Ltd. to fail, the company’s bonds were trading as if its troubles were over. The premium investors demand to hold the company’s 10-year dollar bonds rather than U.S. Treasuries dropped this week to the lowest…

JOHANNESBURG (Capital Markets in Africa) – Shorting the rand against the lira is a popular trade that doesn’t always pay off. But this time is different, a technical signal suggests. UBS Group AG on Wednesday recommended the trade, which Wall Street heavyweights including Bank of America Corp. and JPMorgan Chase & Co. have tried in the past without success. The rand has been the best performing currency in the world this year with a 7 percent gain against…

LAGOS (Capital Markets in Africa) – Don’t be fooled into believing that the emerging-market rally fueled by a “patient” Federal Reserve will last throughout 2019. Satoru Matsumoto, a fund manager at Japan’s Asset Management One Co., which oversees the equivalent of about $490 billion, said the economic slowdown in China followed by the U.S. amid trade tensions will weigh on assets. While developing-nation stocks just completed their best month since March 2016, and currencies scored the biggest…

JOHANNESBURG (Capital Markets in Africa) – South Africa’s state-owned power utility Eskom Holdings SOCLtd. expects a loss of around 20 billion rand ($1.49 billion) for the financial year through March. The estimated loss “is our view based on December 2018 forecasts to year end,” Eskom said in an emailed reply to questions, and due to higher costs to meet demand and to address generation performance. Eskom has said its situation is unsustainable and the government is…

LAGOS (Capital Markets in Africa) – Commodities burst out of the blocks in the new year, surging more than 5 percent in January as oil posted a record advance. In the first full week of February, investors have a crowded agenda, with events and commentary due from market leaders in metals, energy and agriculture. In iron ore, Cleveland-Cliffs Inc., the largest U.S. producer, reports earnings this week and boss Lourenco Goncalves may offer insights into the state…