The Markets

LAGOS (Capital Markets in Africa) – The re-emergence of a huge U.S. equity volatility buyer has banks scrambling to hedge the other side of the trades and is even affecting levels on the Cboe Volatility Index, according to Nomura Securities International. In July, a big purchaser accumulated protection against a major sell-off in U.S. stocks over the next month on the so-called VIX, in activity similar to that of the volatility buyer known as “50 Cent” given…

LAGOS (Capital Markets in Africa) – Trade angst whipsawed financial markets Thursday, with U.S. stocks swinging wildly and Treasuries resuming a rally that pushed the 30-year yield below 2% for the first time. Stimulus hopes in Europe weakened the euro. The S&P 500 attempted to bounce back from one of its worst days of the year, boosted by strong earnings from Walmart Inc. and solid data on the American consumer. Tapestry Inc. tumbled on poor sales, adding…

LAGOS (Capital Markets in Africa) – The gold rally fueled by the U.S.-China trade war is unleashing a growing wave of illegal miners who are increasingly pushing into fragile environments that range from Latin America’s Amazon to South Africa. Bullion has surged 18% over three months to the highest in six years. While that’s good news for mining companies, it’s spurring a burst of illegal prospecting that has helped fuel drug trafficking and organized crime within some of the…

JOHANNESBURG (Capital Markets in Africa) – Discovery Ltd. extended its slump in Johannesburg trading, dropping the most since December 2015, as some investors fretted over the outlook for the medical insurance administrator under South African plans to shake up the country’s health insurance system. Discovery fell as much as 11% Monday before paring the decline to 5% as of 1:47 p.m. At its lows for the session, Discovery was heading for its worst two-day plunge on record….

JOHANNESBURG (Capital Markets in Africa) – Moody’s Investors Service hasn’t said it, but investors already think it: South Africa’s credit is junk. The company, which rates South Africa’s debt Baa3, the lowest investment level, is due to review its assessment in November. Given Eskom Holdings SOC Ltd.’s financial woes and its implications for government debt, the market is pricing in a downgrade. These three charts show how traders view the country’s fiscal outlook: The premium…

KINSHASA (Capital Markets in Africa) – Glencore Plc is planning to halt production at one of the world’s biggest cobalt mines after prices for the battery metal collapsed and costs at the project increased, according to a person familiar with the situation. The announcement that Glencore will close its Mutanda mine in the Democratic Republic of Congo is expected to come as the company lays out an overhaul of its key African copper and cobalt business…

LUSAKA (Capital Markets in Africa) – Currency weakness and tepid economic growth have weighed on business activity in Zambia and South Africa. Purchasing Managers’ Indexes published Monday and Tuesday showed business conditions deteriorated in Zambia and South Africa in July. In Nigeria, Kenya, Ghana, Uganda and Mozambique the indexes remained above the neutral mark of 50, where they’ve been for most of the past two years, indicating improvement. While Zambia’s July PMI reading is lower…