The Markets

NEW YORK (Capital Markets in Africa) — Investors have speculated that the U.S. Federal Reserve may push its benchmark overnight interest rate into negative territory to help offset the economic devastation of the coronavirus pandemic. President Donald Trump has said doing so would be a “Gift” to the U.S. economy. Fed officials led by Chairman Jerome Powell have consistently opposed it. What are markets saying? Implied yields on futures contracts linked to the federal funds…

LONDON (Capital Markets in Africa) — Norway’s $1 trillion wealth fund is doubling down on its climate action by making deeper cuts to its fossil fuel exposure. The exclusions span some of the world’s biggest coal miners and make use of climate rules for the first time to exit oil-sands firms. Glencore Plc and Anglo American Plc, utility RWE AG and Canadian oil producer Suncor Energy Inc. are among those hit by withdrawals that amount to about $3.3 billion based on Bloomberg…

JOHANNESBURG (Capital Markets in Africa) — A London-based hedge fund that has made gains every year since it was founded, through risky bets including Ukrainian GDP warrants and sanctioned Russian bonds, is now putting its money on South Africa. ProMeritum Investment Management LLP has allocated a fifth of its money — its biggest single holding — to South African government bonds, among the worst performers in emerging markets this year. It’s betting on a 15%…

LAGOS (Capital Markets in Africa) — If the first week of the month is anything to go by, the sell-in-May mantra looks set to continue in emerging markets. Despite optimism that the U.S.-China trade-war truce will broadly hold, last week was a losing one for both stocks and currencies, while local bonds were little changed. And the list of uncertainties in the week ahead is likely to ensure caution remains in the driving seat. China’s central bank said on the…

LAGOS (Capital Markets in Africa) — Nigerian manufacturers are struggling to stay in business because a foreign-exchange shortage spawned by the collapse in oil prices means they can’t import raw materials. The industry’s difficulties are the latest signs of strain in Nigeria’s foreign-exchange regime. The central bank was forced to devalue the naira in March as income from crude sales that generate 90% of the West African nation’s export earnings dried up. Foreign investors looking…

LAGOS (Capital Markets in Africa) — Oil’s rally ran out of steam — after prices doubled over five days — as optimism that output cuts are easing the supply glut was balanced by trepidation over what promises to be a long and uncertain recovery. Futures in New York fell toward $24 a barrel after swinging between gains and losses in Asian trading. Diamondback Energy Inc. and Parsley Energy Inc. became the latest U.S. drillers to…