The Markets | - Part 133

Oil Traders Buy Fast, Sell Fast in World’s Newest Futures Market

LAGOS (Capital Markets in Africa) – Less than two months since trading started, China’s oil futures are proving a hit, but it seems mainly with short-term speculators. So short-term, in fact, that they’re holding contracts on average for an estimated two hours. That compares with more than 60 hours for London’s Brent crude and 47 hours for West Texas Intermediate in New York, the global benchmarks that China hopes the Shanghai futures will one day rival. It’s a pattern that’s repeated…

As Emerging-Market Assets Tumble, South Africa Sells Eurobonds

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JOHANNESBURG (Capital Markets in Africa) – South Africa offered a premium for selling Eurobonds just as investors are fleeing emerging-market assets. That it got a sale away at all is evidence of investors’ faith in the country’s new leadership, according to Manulife Asset Management Ltd. and Rand Merchant Bank. Africa’s most industrialized economy raised $2 billion from notes maturing in 2030 and 2048, and priced at 5.875 percent and 6.3 percent respectively, the National Treasury said in an emailed…

Morgan Stanley Says a Shipping Revolution Has Oil Headed for $90

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LAGOS (Capital Markets in Africa) – Forget Iran and OPEC — there’s another issue that will keep oil prices supported for the next two years, according to Morgan Stanley. Brent crude will reach $90 a barrel by 2020 as new international shipping regulations take effect, overhauling the types of fuels produced by refiners, the bank’s analysts said in a report. The changes, which force vessels to consume lower sulphur fuels beginning in January of that…

High Africa Yields Raise Debt-Service Concern, AfDB Says

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LAGOS (Capital Markets in Africa) – Some African countries are overpaying for dollar bonds, raising concern about debt-service costs at a time when currencies are weakening against the greenback, according to the African Development Bank. High-interest rates make the continent’s bonds attractive to investors despite questions about the true extent of the debt loads of countries such as Zambia and the Republic of Congo. “Raising a 30-year bond at a yield of 950 basis points — that’s…

Foreigners Can’t Resist South African Debt. That’s a Problem

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JOHANNESBURG (Capital Markets in Africa) – Foreign investors just can’t resist South African bonds — that should worry policy makers in Africa’s most-industrialized economy. Non-resident holdings of the country’s debt climbed to 43 percent in March from 41 percent at the end of December, according to National Treasury data. That’s almost double the emerging-market average, according to Goldman Sachs Group Inc. figures. When it comes to fixed-rate securities, which constitute 82 percent of South Africa’s 1.76 trillion rand ($140 billion)…

Oil at $100 Is a Possibility Next Year, Bank of America Says

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LAGOS (Capital Markets in Africa) – Oil prices could rally to $100 a barrel next year, a level not seen since 2014, as supply risks in Venezuela and Iran strain global markets, according to Bank of America Corp. Brent futures, trading near $77 on Thursday, are set to reach $90 in the second quarter of 2019 as world inventories shrink, the bank said. As that view hinges on OPEC reviving output and a limited impact on…

Oil Traders Prepare to Cut Iranian Crude on Trump Sanctions

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LAGOS (Capital Markets in Africa) – European oil refiners and trading houses began preparing to cut purchases of Iranian crude after Washington imposed harsher sanctions on shipments from Tehran than many in the energy industry had expected. The Trump administration has given buyers 180 days to wind down imports after pulling out of a landmark nuclear deal with world powers. Many of the traders and refiners who spoke to Bloomberg anticipate they’ll have to curb purchases…

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