The Markets | - Part 133

Key Nigeria Crude Oil Flows Disrupted as Pipelines Are Curtailed

LAGOS (Capital Markets in Africa) – Royal Dutch Shell Plc declared curbs on the flow of Nigeria’s Bonny Light crude, disrupting post-conflict recovery in the West African country’s oil industry. Shell’s local unit on Thursday declared force majeure on Bonny Light exports following the shutdown of the Nembe Creek Trunk Line by the operator, Aiteo Eastern E&P Co. It came just days after loadings of the country’s Forcados crude were said to be delayed. Forcados and Bonny are…

Goldman Tells Big Oil: Take the Gas Risk, Demand Will Follow

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LAGOS (Capital Markets in Africa) – The world’s largest energy producers will probably start hitting the gas on new projects, according to Goldman Sachs Group Inc. Suppliers are better placed than buyers to bear the cost and risk of new liquefied natural gas projects, and may drive the next wave of investment, the bank said in a note. While the industry’s aware of the need for more output, the traditional model, where financing for new LNG…

Bond Bonanza Raises Threshold for New Emerging-Market Debt Sales

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LAGOS (Capital Markets in Africa) – Emerging-market issuance is losing its fizz and bond investors are divided in their appetite for risk after a record year for hard-currency debt. With about $290 billion in placements by borrowers from developing nations so far this year, volumes have been slipping since the second week of April when a slew of multi-tranche deals from Saudi Arabia, Qatar and Egypt accounted for half of the $50 billion of bonds…

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

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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…

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