Currency | - Part 7

South Africa Rand Rout Little Help as South African Companies Hoard Cash

Johannesburg, South Africa, Capital Markets in Africa: South African businesses are flush with money. Too bad they aren’t willing to spend it at home. They’re hoarding cash or expanding abroad, put off by a stagnating economy, power shortages, low commodity prices and slower growth in export markets China and Europe. Delays in passing business regulations and a dispute between President Jacob Zuma and Finance Minister Pravin Gordhan are compounding their unease. “Corporate South Africa has continued to build international business…

Nigeria’s Currency Chaos Deepens as Bets on Devaluation Rise

Posted on by The Editorial Team

LAGOS, Nigeria, Capital Markets in Africa: As investors increasingly bet the bottom will drop out of the naira and the vice president hints at a devaluation, the man who calls the shots – President Muhammadu Buhari, who has resisted letting the currency weaken since coming to power a year ago, likening it to “murder” — has kept quiet. “I won’t believe it until I see presidential ownership of it,” Alan Cameron, an economist at Exotix Partners…

South African Rand Slumps as Gordhan Breaks Silence on Talk of Arrest, Firing

Posted on by The Editorial Team

Johannesburg, South Africa, Capital Markets in Africa: The rand slumped as much as 2 percent against the dollar and bonds fell as concern intensified around the role of South African Finance Minister Pravin Gordhan, who broke his silence over reports that he may be arrested and dismissed. The rand was 1.7 percent lower at 15.8106 by 12:26 p.m. in Johannesburg, the weakest since March 15 on a closing basis and the worst performance among 31 major and developing…

Deregulation With Price Controls. Precursor to Devaluation?

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LAGOS, Nigeria, Capital Markets in Africa: Last week, the Federal Government finally took a step to pseudo-deregulate the downstream sector (the FGN refused to use the word deregulation). This initiative was expected due to the introduction of the price modulation template by the NNPC in January 2016 and also the 2016 budget had no provisions for petrol subsidy payments. Under the new framework, market players are now permitted to source FX independently of the CBN…

Desperate for Dollars, Investors Line Up for a Sure-Fire Loser

Posted on by The Editorial Team

CAIRO, Egypt, Capital Markets in Africa: The hot trade in Egypt’s stock market is a sure thing — a guaranteed money-loser. Clients have been snapping up shares of Commercial International Bank Egypt on the Cairo market, paying in Egyptian pounds, only to turn around and sell them in London for dollars at a loss of as much as 30 percent, brokers say. Big international companies are so desperate to get dollars that they’re willing to…

Market Watch | Emerging Stocks Decline for Fourth

Posted on by The Editorial Team

LAGOS, Nigeria, Capital Markets in Africa: Emerging-market stocks were set to extend their longest losing streak since August and currencies retreated on concern the pace of global growth remains sluggish. Shares in China posted their worst run of weekly declines in two years on speculation the government will refrain from adding fresh stimulus, while Hungarian shares fell and the forint slid to the lowest level since March after the economy unexpectedly contracted. South Africa’s rand slid more than 1…

South Africa Rand Falls Most Among Emerging Markets After Jobless Rate Climbs

Posted on by The Editorial Team

Johannesburg, South Africa, Capital Markets in Africa — The rand fell to its weakest in a month after data showing theSouth African jobless rate at the highest in at least eight years added to concerns that economic growth may be slow to revive. The rand dropped as much as 2.1 percent against the dollar and traded at 15.1716 by 4:38 p.m. in Johannesburg, the weakest since April 7 on a closing basis and the biggest loser among 24…

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