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.
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.
30 Jan 2017
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.
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.
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.
13 Dec 2016
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.
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 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 (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.
- Mozambique will restructure, but opportunities ahead
- Nigeria’s FX policy deters investors, may lead to corruption
- A Tale of Two Corporates: Nigeria’s First Corporate Eurobond Sales of 2016
- Kenya’s Treasury exploring potential yen, yuan borrowing
- South African politics to make downgrade inevitable
21 Feb 2017
21 Feb 2017
20 Feb 2017
20 Feb 2017
17 Feb 2017
16 Feb 2017