The Markets

LAGOS (Capital Markets in Africa) — Solvency concerns in the developing world are nothing new. But as governments stare down the humanitarian and economic shocks of the coronavirus pandemic, some emerging markets with weak financial positions are at greater risk of defaulting on their debts. More than 100 nations have asked the International Monetary Fund for help, and the Institute of International Finance is coordinating an effort to offer some relief to the poorest countries….

NAIROBI (Capital Markets in Africa) — Kenya’s biggest source of foreign currency slumped last month, with the central bank indicating that shocks caused by the coronavirus will have a greater impact on the economy for the rest of this year. Kenyans living outside the country sent home $208 million in April, about 9% less than they did in March, according to data from the central bank. It expects those so-called remittance payments to fall as…

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…