The Markets

LAGOS (Capital Markets in Africa) — With the biggest event risk in recent memory over, Wall Street is quietly confident that systematic funds that take their cues from market swings are set to spend billions of dollars, fueling this stock rally. For this $1 trillion cohort, it all hinges on stable prices, a relative rarity during this rocky year. But lately, equities are sending the right signals. Realized volatility is starting to come down in…

LAGOS (Capital Markets in Africa) — Nigeria has allowed Dangote Cement to resume exports across its land borders, raising hopes that Africa’s most populous nation may be opening up trade with neighbors after a year-long blockade. President Muhammadu Buhari’s administration gave permission for Africa’s biggest cement producer to export to Niger and Togo in the third quarter for the first time in ten months, Michel Puchercos, chief executive officer, said on an investor call Monday. The exemption…

HARARE (Capital Markets in Africa) — A key bondholder group is set to reject Zambia’s request for an interest-payment holiday, putting the country on course to become the first African sovereign defaulter since the onset of the coronavirus pandemic. There is consensus among the so-called Zambia External Bondholder Committee to refuse the proposal, with a voting deadline of Wednesday ahead of Friday’s meeting with creditors, according to two people with direct knowledge of the matter who asked…

ACCRA (Capital Markets in Africa) — Ghana is missing out on a rally of African bonds as investors fret about an expansion in spending and borrowing ahead of elections in December. The elevated borrowing to cover the spending shortfall has seen the country’s three-year and longer-dated local bond yields rise on the secondary market even as those of its peers on the continent are falling. This is likely to increase future cost of issuing new…

HARARE (Capital Markets in Africa) — Zimbabwe’s measures to stabilize the country’s currency is finally paying off: the local dollar is heading for back-to-back months of gains for the first time since it was re-introduced 18 months ago. This comes after the southern African nation’s central bank introduced weekly foreign-currency auctions and cracked down on mobile-money transactions, blamed by authorities for undermining the currency. The Zimbabwe dollar slumped to 83.39 per U.S. dollar on August 26 after…

LAGOS (Capital Markets in Africa) — This month’s emerging-market rally is showing signs of faltering as investors refrain from placing big bets in the final two weeks of the U.S. election campaign. Even as Democrat Joe Biden has widened his lead over President Donald Trump in recent polls, a Bank of America Corp. survey showed global fund managers expect the outcome to be contested and are ready for extreme market turbulence. While growing odds that Democrats will…

LAGOS (Capital Markets in Africa) — Bond investors are pouring money back into riskier debt in search of higher returns as Covid-19 flare-ups and clampdowns have money managers bracing for interest rates to remain low for a long time. Five of the six U.S. junk bonds that companies sold on Wednesday were increased in size to accommodate heavy demand, and yields ended up being lower than initially targeted on the deals. In the secondary market, notes…