The Markets

LAGOS (Capital Markets in Africa) – If the muted reaction to the flurry of potentially market-moving events last week is anything to go by, emerging-market currencies are unlikely to be headed into a period of major price swings. But that’s just fine for the carry trade. A Bloomberg currency index that measures carry-trade returns from eight emerging markets funded by short positions in the dollar gained for a second week in the five days through April 12,…

LONDON (Capital Markets in Africa) – With the EU divorce now months away, there’s plenty of time for the yield-hunters to swoop on U.K. corporate bonds.  Brexit hasn’t gone away – it’s just resting – but the six-month extension agreed with the European Union could turn out to be a capital markets opportunity.  The search for yield is the overriding theme for bond investors this year, and U.K. markets are no exception. From that perspective the window…

LAGOS (Capital Markets in Africa) – Libor isn’t gone yet, but global financial regulators want to make sure everyone understands that the scandal-tarred benchmark may be on its way out and that they are prepared to embrace an alternative rate. The need for transition away from the London interbank office rate will be the focus of a discussion in Washington on Wednesday led by Randal Quarles, the Federal Reserve’s bank supervision chief and head of the Financial…

JOHANNESBURG (Capital Markets in Africa)  – De Beers’ Chief Executive Officer said an improvement in diamond sales demonstrates that the poor demand for smaller stones that has plagued the company and its competitors in recent months is stabilizing. Bruce Cleaver, the CEO of the world’s biggest diamond company, said the poor demand for stones valued at less than $100 a carat has been due to a surfeit of supply, currency weakness in India and the…

LAGOS (Capital Markets in Africa) – The global financial industry must move faster and prepare for the demise of the scandal-tarred interest-rate system that underpins $370 trillion in derivative, bond and loan contracts. The London Interbank Offered Rate, or Libor, is expected to stop being the go-to benchmark by the end of 2021, Eric Litvack, chairman of the International Swaps and Derivatives Association, said on April 11 in Hong Kong. Changes needed to prepare for the deadline are…

LAGOS (Capital Markets in Africa) – By now you’ve almost certainly heard (and heard) about Modern Monetary Theory. Opinions on the validity of MMT are a dime a dozen, but how to trade MMT has been Wall Street’s great unknown, according to Bloomberg Opinion’s Brian Chappatta. So here it is. A discussion with investors on how to allocate, invest and hedge if MMT comes to pass — assuming it hasn’t already. Prepare for MMT? It’s already here “It…

NAIROBI (Capital Markets in AfricaA)  – At their peak, Kenya’s Uchumi Supermarkets Plc, retailer Deacons East Africa Plc, Mumias Sugar Co. and Eveready East Africa Ltd. were market leaders in their industries and well-known brands in East Africa’s largest economy. Today, the companies are penny stocks. Uchumi has lost 97 percent of its value in the past five years and slumped to a fresh record low in Nairobi Wednesday. Deacons and Mumias shares trade at less…