Bond |

Asia’s Highest Yielder Is Losing Appeal Relative to South Africa

LAGOS (Capital Markets in Africa) – Having the highest inflation-adjusted yield in Asia isn’t enough for emerging-market bond investors any more. That’s the message from Saxo Bank A/S, which says Indonesia is losing its appeal over countries such as South Africa because of better prospects for political stability and reforms. The rupiah slumped to a two-year low this month despite offering the highest inflation-adjusted yield in Asia and after having been upgraded in recent months by ratings…

Weak Links in Emerging Markets Show Where Selloff May Start

Posted on by The Editorial Team

LAGOS (Capital Markets in Africa) – There’s probably just one headline that could end the party in emerging markets, and it’s likely to come from the Federal Reserve. If a rebound in U.S. inflation prompts the central bank to chip away at its wall of money sooner and faster than expected, then the rally that boosted returns in developing-nation stocks, bonds and currencies since January 2016 will be under threat. While money managers don’t see…

`Cautious’ BOE Makes Gilt Slide a Buy for Macquarie Investment

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LONDON (Capital Markets in Africa) – The market’s pricing of two interest-rate hikes in coming months by the Bank of England is “a bit overdone” for Macquarie Investment Management and so it sees the recent fall in gilts as a buying opportunity. Markets are pricing in an 85 percent chance of a 25-basis-point rate increase for the next BOE meeting on Nov. 2, more than double the probability in early August after growing inflationary pressures in the U.K. and…

Investors Undeterred by Risks as South Africa Bond Inflows Soar

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JOHANNESBURG (Capital Markets in Africa) – Political turmoil, the risk of a widening budget deficit, a weakening currency and the prospect of a credit downgrade to junk would usually put investors off a country’s bonds. Not when it comes to South Africa. The lure of the highest yields among emerging-market peers is proving irresistible, with foreign investors buying a net 18 billion rand ($1.3 billion) of South African bonds in September, the most in a month…

Next Leg of Emerging-Bond Rally About to Start as Rate Cuts Loom

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LAGOS (Capital Markets in Africa) – The bond rally across emerging markets may get fresh legs. Pressure is growing on central banks in developing nations to cut interest rates more aggressively as inflation eases and the Federal Reserve takes a gradual approach to policy change. That’s reducing the need for the high borrowing costs that deter capital outflows and protect emerging-market currencies. Looser monetary policy is a potential boon to already surging sovereign and corporate bonds in emerging…

Kenya Bond Rally Fueled by Investors Who Are Out of Options

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NAIROBI (Capital Markets in Africa) – Kenya’s best bond rally in at least five years has less to do with faith in the sovereign than finding a place to hide. An index of the government’s local-currency debt has advanced for 68 straight days, the longest run since Bloomberg began tracking the data in 2012, as an increase in non-performing loans and high charges on investments by insurance companies outside of government debt boost demand for the bonds….

Mozambique MPs Back State Guarantees for Previously Hidden Debt

Posted on by The Editorial Team

MAPUTO (Capital Markets in Africa)- Mozambique’s parliament ratified a law that provides state guarantees for previously hidden loans of two state-owned companies that sparked a debt crisis in one of the world’s poorest countries. Lawmakers from the ruling Front for the Liberation of Mozambique approved the state accounts for 2015, which included guarantees for loans worth $1.12 billion that ProIndicus and Mozambique Asset Management took out in the prior two years. Opposition members left the…

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