Currency | - Part 5

Emerging Markets Extend Losses as Fed Wake-Up Call Halts Rally

LAGOS, Nigeria, Capital Markets in Africa: Emerging-market stocks fell for a second day and currencies retreated from a 13-month high as renewed prospects for a U.S. interest-rate hike this year sapped risk appetite. Saudi Arabian shares dropped the most in almost three months and futures on Ibovespa declined on lower commodity prices. Egypt’s benchmark index slid for a second day as Commercial International Bank, which accounts for 40 percent of the gauge by weight, headed for…

Currency conundrums in Zimbabwe

Posted on by The Editorial Team

HARARE (Capital Markets in Africa) – Zimbabwe abandoned the use of its own currency, the Zimbabwe dollar, in February 2009 and adopted a multi-currency regime. The demise of the Zimbabwe dollar was not mourned. By the time it was phased out it had lost all credibility as a medium of exchange, after years of hyperinflation running to many million percent. While the multi-currency regime legalised the use in Zimbabwe of a number of currencies, among…

Emerging Stocks Extend Rally as Earnings Buttress Stimulus Bets

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LAGOS, Nigeria, Capital Markets in Africa: Emerging-market stocks headed for the longest streak of weekly gains since Russia’s Crimean invasion ended a similar run in March 2014, on signs corporate earnings are recovering even as central banks extend measures to nurture economic growth. Chinese shares rallied the most in a month as property companies advanced on speculation merger deals will accelerate. Hungary led gains in eastern European equities as the nation’s economy grew more than forecast….

Nigeria | Naira Forwards, Volatility Surge as Nigeria Removes Spread Limit

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LAGOS, Capital Markets in Africa: Naira forwards rose to record highs and volatility surged after the Central Bank of Nigeria removed a limit on bid-offer spreads in the foreign-exchange market, raising expectations the currency is set to extend declines as it trades more freely. Three-month non-deliverable forward contracts jumped 4.1 percent to a record329 per dollar by 4:41 p.m. in Lagos, while contracts maturing in a year rose 3.3 percent to 363, also the highest level…

Embracing Local Capital Markets: An Alternative Approach to Hedging Currency Risk in Africa

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LAGOS, Nigeria, Capital Markets in Africa: With the appearance of stalwarts of the global private equity industry in Africa such as Carlyle, the Abraaj Group and Temasek, the outlook for private equity flows into the continent should be promising. The reality for these fund managers, is that the majority of growth being created is in local currency and as such their returns are impacted by volatility in exchange rates between local currency and the US…

Market Watch | Emerging Markets Extend Losses as Concern Over Brexit Resurfaces

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LAGOS, Nigeria, Capital Markets in Africa: Emerging-market stocks fell for a second day and currencies headed for the longest streak of losses in three weeks as investors switched to haven assets on concern the Brexit contagion is spreading. The MSCI Emerging Markets Index dropped 1.4 percent to 820.19 at 12:08 p.m. in New York, paring its gains this year to 3.3 percent. A gauge of currencies slid for a third day after Bank of England Governor Mark Carney said Tuesday the…

Tanzania Central Bank ‘Must’ Defend Currency, President Says

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Dar es Salam, Tanzania, Capital Markets in Africa: Tanzania’s central bank should rally to the defense of the shilling by taking steps such as stopping the “dollarization” of the economy, President John Magufuli said. The currency of the natural gas-producing country has weakened almost 2 percent against the dollar this year, extending depreciation of 19 percent in 2015. Tanzania held $3.9 billion of gross international reserves at end-March, sufficient for 4.1 months of imports. “The central bank…

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