The Markets

LAGOS (Capital Markets in Africa) — Corporate credit metrics diverge across Eastern Europe, the Middle East and Africa (EMEA), as sector spreads are tightly correlated to sovereign risk. Fundamentals continue to improve for the region’s energy sector issuers, while EMEA banks remain subject to idiosyncratic, country-specific risk.  EMEA energy sector debt valuations are driven by country rather than company fundamentals, resulting in higher yields than emerging market peers. Energy sector issuers from Central Asia and…

ABIDJAN (Capital Markets in Africa) – Ivory Coast cut its forecast for debt sales in West Africa’s regional market this year, raising the likelihood of a larger Eurobond issuance to fund its budget. The world’s top cocoa producer plans to reduce its local-currency issuance in the eight-member West African Economic and Monetary Union by almost a third from last year, according to Agence UMOA-Titres, the bloc’s debt agency. That will leave the nation with a balance…

JOHANNESBURG (Capital Markets in Africa) – Shoprite Holdings Ltd. shares slumped the most since 1999 after Africa’s biggest grocer said first-half earnings dropped as much as 26 percent, with South African food deflation and IT troubles compounding weakness in the rest of the continent. Headline earnings per share declined between 16 percent and 26 percent to as little as 3.89 rand, the Cape Town-based supermarket operator said in a statement after the market closed on Tuesday. Key Insights…

LAGOS (Capital Markets in  Africa) – The rising-dollar trend that inflicted so much damage on risk appetite in 2018 is all but a thing of the past, according to Amundi Asset Management. And that can only be good for emerging markets. “The two macro threats — basically the dollar and higher interest rates coming from the U.S. — are basically diminished and they are behind us,” Pascal Blanque, group chief investment officer for Amundi, said in…

JOHANNESBURG (Capital Markets in Africa) – As if January’s potential record gain isn’t enough, the rand may be in for a positive February as well if history is any guide. Seasonal data show that South Africa’s currency has strengthened against the dollar in February in seven of the past 10 years. Optimism about local political developments and a global risk-on mood spurred the rand to back-to-back monthly gains in January and February last year, and the same factors have…

CAIRO (Capital Markets in Africa) – It appears foreign investors can no longer resist the allure of some of the juiciest yields in emerging markets. In debt auctions held this week, they bought 30 percent of Egyptian local-currency Treasury bills and more than half of longer-dated bonds, the Ministry of Finance said in a statement on Tuesday. They acquired all of the five-year securities sold a day earlier, in what the ministry labeled a clear sign of…

LAGOS (Capital Markets in Africa)  – The fortunes of Egypt and Nigeria’s local-currency bonds have diverged. Foreign inflows into Egyptian Treasury bills has narrowed the yield gap with Nigerian assets to below a percentage point for the first time in almost a year. That’s partly because the North African nation hasn’t been making headlines, which is in sharp contrast to Nigeria, where assets missed out on a rally this year because of political chaos ahead of general elections…