The Markets

HARARE (Capital Markets in Africa) — When Zimbabwe suspended trading on its stock exchange last week, James Hove was left with no access to the funds he needs to conduct his business. Like many wealthy Zimbabweans, Hove invests in the local stock market. Not for the value, he sees in the companies whose stocks trade on it, but as a hedge against surging consumer prices while annual inflation is running at 786%, the benchmark Zimbabwe…

LAGOS (Capital Markets in Africa) – ICE Brent crude oil front-month prices averaged $42.2 p/b in the first half of 2020, constituting a drop of 32.2% from an average of $62.3 p/b in the second half of 2019. The decline in prices was due to the spread of the coronavirus that led to the enforcement of lockdown measures worldwide, which reduced global demand for oil. Also, prices averaged $33.5 p/b in the second quarter of…

HARARE (Capital Markets in Africa) — Stockbrokers in Zimbabwe are struggling to explain to investors what’s happened to their money after the government shut down the stock exchange. The Zimbabwe Stock Exchange announced Sunday it suspended trade to comply with a directive issued by the Information Ministry late Friday that the bourse close. It’s the latest in a series of measures the government has implemented to try and stabilize the nation’s currency. Traders have been…

SUNDA (Capital Markets in Africa) — Sudan took a further step toward agreeing to a staff-monitored program with the International Monetary Fund, a deal the North African country says is crucial to overhauling its battered economy. The IMF and Sudan’s transitional government have reached a preliminary accord on policies for the prospective one-year, non-financial program, the lender said in a statement. The announcement comes before a Thursday donor conference where Sudan, blighted by years of…

LAGOS (Capital Markets in Africa) — Nigerian companies are poised to raise a record amount of local short-term debt, joining one of the biggest global junk-bond rallies in two months as businesses take advantage of a drop in borrowing costs. Companies including Dangote Cement Plc, Union Bank of Nigeria Plc and MTN Group Ltd. have tapped the domestic market this year to refinance existing debt or boost working capital. It comes as firms from casino operators and retailers to lenders…

HARARE (Capital Markets in Africa) — Zimbabwe’s central bank abandoned a currency peg it introduced in March and said it would allow the rate to be set by an auction system. The announcement represents a setback for Reserve Bank of Zimbabwe Governor John Mangudya, who unilaterally imposed the peg of 25 to the U.S. dollar against the advice of the bank’s Monetary Policy Committee, according to people familiar with the situation. The introduction of the…

JOHANNESBURG (Capital Markets in Africa) — South Africa must cut spending to avoid a sovereign debt crisis within the next four years, Finance Minister Tito Mboweni said. Mboweni is preparing to deliver a revised budget on June 24 that will reflect the devastation wrought on the economy by the coronavirus pandemic, he told lawmakers Thursday in Cape Town. The Treasury plans to make “very serious and unusual changes” to its expenditure plans, he said. “We…