Africa

17 Feb 2017   Macro, Ratings, Policy, Africa

Basel III Could Drive Banking Sector Credit Rush in South Africa

With about ZAR72bn in senior unsecured bank debt maturing in 2017 and new Basel III requirements being phased in January 2018, analysts are forecasting an uptick in senior and subordinated issuance in South Africa through 2017 – a welcome change from relatively subdued volumes seen last year.

African Underperformers Under Stress, But Causes Differ

Nigeria and Mozambique are both in crisis-mode, but the underlying causes mean investors should be cautious to treat each case separately. To paraphrase Leo Tolstoy, all healthy economies are the same, but the sick ones struggle in their own unique way.

Access Bank CFO Seyi Kumapayi on Managing Risk in a Tough Market

Nigeria’s economy was hit hard in 2016 as the naira tumbled and revenues from oil imports dwindled, the result of a dramatic shift in monetary policy and persistently low oil prices, respectively. We speak with Access Bank CFO Seyi Kumapayi about the bank’s landmark bond sale in this challenging landscape.

Kenya’s Currency Plunge Adds to Banking Woes

The Central Bank of Kenya (CBK) continues to drain excess of liquidity from the market, with smaller banks that depend on the regulator for capital likely to take a hit, analysts suspect.

With Political Volatility on the Rise, South Africa’s DCM Prospects Remain Challenged

The past year has not been kind to South Africa, with a recent reprieve from a sovereign credit rating downgrade one of the few pieces of good news to greet analysts, the country’s treasurers, CFOs and capital markets professionals. Despite a brief upswing in activity through Q4, there are reasons to suspect the DCM outlook remains challenged to say the least.

Kenya Outperforms but Long Term Challenges Remain

As one of the largest and most diversified economies in Africa, Kenya is currently outperforming many of its neighbours. As a net commodities importer, the country has been comparatively insulated from the impact of depressed oil prices and volatile agricultural goods markets on government budgets and economic growth. While medium term growth looks healthy, long term structural challenges remain.

Miner’s Canary of FI Consolidation in Kenya: Mauritius’ SBM to Acquire Fidelity

SBM’s acquisition of Kenya’s Fidelity Commercial Bank Ltd. shows there is plenty of interest among foreign lenders in Kenyan equity, but the symbolic one dollar price indicates that smaller entities are still under threat.

Weak Demand for Nigeria Bond Signals Continued Market Discontent with Currency Controls

As low oil-prices continue to devastate the Nigerian economy, painfully low levels of participation seen in last Wednesday’s sovereign issuance once again highlighted the need to free up the African country’s capital and FX markets before real progress can be made.

South African Fundamentals Boost to Credit Despite Expected Downgrade

South Africa’s expected downgrade is unlikely to significantly rock the markets as they are likely to have pre-empted the rating agencies’ decision, factoring in a likely downgrade. Nevertheless, there will be some short-term volatility, but relatively strong fundamentals, low liabilities and a tentatively improving rand mean that the country’s debt could be a worthwhile buy when the downgrade comes.

Sub-Saharan Africa Not in Debt Crisis… Yet

Sub-Saharan Africa (SSA) is not yet facing a debt crisis, and issuing debt is the only way for the economies of the region to fund their existing debt and finance their budget deficits. However, prudent use of funds is necessary to maintain credibility otherwise Eurobond funding is likely to dry up, the cost of which local and concessional borrowing alone will not be able to cover.

 

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