The Markets

LAGOS (Capital Markets in Africa) — Foreign investors in Nigeria trapped by the lack of dollar liquidity are reinvesting in short-term debt, driving down yields to new lows. Discount rates on the high-yielding instruments dropped to the lowest levels since April 2016 as investors with nowhere to go piled into them. The stop rate for one-year paper, also known as Open Market Operation bills, fell to 9.9% at a central bank auction on Thursday, the…

LAGOS (Capital Markets in Africa) — The Nigerian Stock Exchange expects more delays in initial public offerings as the coronavirus pandemic weighs on Africa’s second-biggest market, according to the chief executive. “We don’t think we will see IPOs in the short term, given some of the uncertainties Covid-19 has brought,” CEO Oscar Onyema said at a virtual conference on Wednesday. Companies seeking to raise capital are showing a preference for rights issues and private placements,…

JOHANNESBURG (Capital Markets in Africa) — South Africa’s Public Investment Corp. appointed Abel Sitholeas its chief executive officer, filling a post vacated 18 months ago by his predecessor over accusations of questionable investment decisions. The appointment comes two months after a judicial inquiry found senior management flouted internal procedures and recommended sweeping changes to laws that govern the PIC. President Cyril Ramaphosa ordered the investigation in October 2018, one of a handful he’s instituted to probe alleged…

NEW YORK (Capital Markets in Africa) — Jamie Dimon sees “pretty good odds” of a fast economic rebound starting in the third quarter thanks to the U.S. government’s stimulus programs and the strength of the consumer going into the pandemic. “You could see a fairly rapid recovery,” the JPMorgan Chase & Co. chief executive officer said Tuesday at a virtual conference hosted by Deutsche Bank AG. “The government has been pretty responsive, large companies have…

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…