The Markets

LONDON (Capital Markets in Africa)-  Hedge fund Chenavari Investment Managers has extended its gains this year to as much as 94% thanks to bets on credit-market volatility during the coronavirus pandemic. The firm’s $400 million Dynamic Credit Cycle Fund achieved the gains through March 16 after having already made 70% by March 12, according to a note sent to investors and seen by Bloomberg. Its strategy for the past two years has been to seek to benefit…

LAGOS (Capital Markets in Africa) – Four years after Nigeria tried and failed to stop its currency from collapsing, Africa’s biggest crude producer is again reacting to this oil crisis the same way it did in the recent past. It worked out badly then as oil revenues, which account for 90% of foreign-exchange earnings, failed to rebound in time — leading to a depletion in the central bank’s firepower to defend the naira. It will…

JOHANNESBURG (Capital Markets in Africa) – South Africa’s biggest labor organization and the nation’s main business lobby are pushing the government to find a way to utilize an unemployment fund with assets of about $11 billion to fight the effects of the coronavirus outbreak. The Congress of South African Trade Unions and Business Unity South Africa, or Busa, told the government at a meeting on Monday that it must find ways to use the Unemployment Insurance…

LAGOS (Capital Markets in Africa) – Banks rallied on Friday morning after Goldman Sachs said stocks were starting to appear attractive after a 41% sell-off, with investors accounting for lower interest rates and a much higher probability of recession. A “zero percent interest rates scenario appears fully priced in,” analyst Richard Ramsden wrote in a note upgrading Morgan Stanley to buy from neutral and U.S. Bancorp to neutral from sell. The market may now believe “low rates for a protracted period of time…

LAGOS (Capital Markets in Africa) – Emerging-market equities posted their worst daily decline since November 2008 as traders shunned all but the safest securities on concern U.S. measures to stem the gathering pace of the coronavirus outbreak aren’t robust enough. Currencies weakened and sovereign bond spreads widened. The MSCI Emerging Markets Index of equities fell 6.6% Stock benchmarks from Brazil to Poland and Thailand tumbled more than 10% A measure of currencies dropped by the most in almost four…

LAGOS (Capital Markets in Africa) – Oil’s rout may have been an unexpected boon for the biggest buyers of liquefied natural gas, but its knock-on effects may come back to bite. That’s because more than a dozen proposed LNG export projects from the U.S. to Mozambique are at risk of being delayed or scrapped as crude careened to levels that make most of them unprofitable. If fewer of them come to fruition, that would ease…

LAGOS (Capital Markets in Africa) – The Nigerian central bank denied it plans to devalue the naira soon, and announced an investigation to uncover currency dealers it blames for sparking a “panic” market sell-off this week. “Market fundamentals do not support naira devaluation at this time,” the bank said in a statement released late on Thursday by spokesman Isaac Okorafor. The global market turmoil sparked by the coronavirus contagion and this week’s collapse of oil prices…