The Markets

LONDON (Capital Markets in Africa) – Trade Secretary Liam Fox said he’s confident the U.K. can agree a divorce deal with the European Union by the end of next month because the continent’s faltering economies will force the bloc to come to an “accommodation.” Citing Italy entering recession and weakness in the German and French economies, he said the EU 27 should be pushing for a deal.  “This is not a good time to introduce further unnecessary instability into…

NAIROBI (Capital Markets in Africa) – Benchmark South African bond yields dropped to eight-month lows in the wake of the Federal Reserve’s more dovish stance — and there may be more to come, with inflation expectations plummeting and investors pricing out any chance of a rate hike in the next two years. Yields on government securities due 2026 fell 16 basis points on Thursday to the lowest since June 1 on a closing basis. South African local-currency bonds have…

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…

CAIRO (Capital Markets in Africa) – Egypt approached JPMorgan Chase & Co.’s to be included inclusion in its emerging-market bond indexes and is making progress on a plan to make it easier for foreigners to invest in its local debt, Finance minister Mohamed Maait said. “Our strategy aims to reduce our borrowing costs and make our debt more attractive,” Maait said in a telephone interview on Thursday. Joining the JPMorgan indexes would “have a positive impact as…

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…