#Africa #Markets | 22 Aug

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Asia shares sit still, await clarity on Fed policy
  • Asia subdued, strong retail earnings lift Wall st
  • Fed minutes show division on rate cuts
  • Trump says no longer looking at tax cuts
  • PMI surveys, ECB minutes due Thursday

Oil Markets

  • Oil prices rise after US crude stocks draw
  • Brent up 0.5% at $60.57 a barrel (0051GMT)
  • WTI up 0.6% at $56.03

Precious metals

  • Gold prices stable; all eyes on Fed summit for rate-cut direction
  • Spot gold flat at $1,501.73/oz. (0143GMT)
  • US gold futures down 0.3% at $1,511.50

Grains

  • Corn rebounds from 3-mth low on strong demand
  • Most active CBOT wheat futures up 0.2% at $4.69 per bushel (0048GMT)
  • Most active corn futures up 0.3% at $3.71-1/2 per bushel
  • Most active soy futures nearly unchanged at $8.73-1/4 per bushel
  • Most active rice futures unchanged at $11.22 per hundredweight

Key African events or data releases today
[Posts & comments at my Twitter handle @DrRafiqRaji]

  • Kenya marks 41st anniversary of founding father Jomo Kenyatta’s death
  • Rwanda monetary policy & financial stability statement
  • South Africa’s Ramaphosa to answer questions in parliament
  • WHO Africa regional conference in Brazzaville, Congo; 19-23 Aug
  • Nigeria Q2-2019 GDP [fcst. 2.5% yy, prev. 1.9%]

Key African events or data releases yesterday & early a.m today
[Posted & commented on some headlines below at my Twitter handle @DrRafiqRaji]

  • Sudan’s Hamdok takes office as new prime minister, vows to tackle conflicts
  • Mali’s new mining code ends tax exemptions, other protections
  • Nigeria’s 3-yr milestone takes Africa towards polio eradication
  • Turbulence on Spanish flight from Mauritius injures 14
  • Africa Oil – Nigerian October programmes trickle out
  • South Africa’s Omnia CEO resigns, finance director appointed as replacement
  • South Africa rand rallies after data shows slowing inflation, stocks up
  • Leaders of Rwanda & Uganda sign pact in bid to end tension
  • Zimbabwe charges former Mugabe deputy with abuse of office
  • Nigeria’s Buhari assigns cabinet portfolios, appoints new oil minister
  • Nigeria’s 3-yr milestone takes Africa towards polio eradication
  • Nigeria’s Buhari assigns cabinet portfolios, appoints Timipre Silva oil minister
  • South Africa court rules display of apartheid flag constitutes hate speech
  • South Africa court sets aside arms deal inquiry findings
  • Uganda shilling a touch stronger on commodity flows
  • Zimbabwe July inflation at 21.04% m/m – statistics office
  • Egypt’s Zohr gas field output rises to 2.7 bln cubic feet per day – minister
  • South Africa’s July consumer inflation falls to lowest since Jan., raising bets of rate cuts
  • Head of Sudan’s now-defunct military council sworn in as head of sovereign council
  • Kenya shilling strengthens against the dollar
  • South Africa consumer inflation slows to 4% in July, lowest in 7 months
  • Moderate Islamists make new power quest in Tunisia
  • NZ lawmakers urged to drop restrictions on Africa, Middle East refugees

N.B. Full stories of above headlines are available on Reuters

#Africa #Markets | 21 Aug

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Caution grips Asian shares before Fed minutes, seminar
  • MSCI ex-Japan near flat; Nikkei falls 0.4%
  • Trump says he had to ‘take China on’
  • Eyes on Fed minutes, Jackson Hole meeting for rate outlook

Oil Markets

  • Brent oil rises above $60, buoyed by US inventory drawdown
  • API data shows bigger-than-expected drop in US crude inventory
  • US warns Iran tanker not to deliver oil to Syria
  • Weekly EIA inventory at 1430 GMT
  • Brent up 0.2% at $60.16 a barrel (0136GMT)
  • WTI up 0.2% at $56.25

Precious metals

  • Gold prices hold firm above $1,500, Fed minutes in focus
  • Spot gold down 0.1% at $1,505.42/oz. (0116GMT)
  • US gold futures flat at $1,516.20

Grains

  • Corn firms after 2 days of losses, US crop tour in focus
  • Most active CBOT wheat futures down 0.2% at $4.65-3/4 per bushel (0121GMT)
  • Most active corn futures up 0.1% at $3.69-1/4 per bushel
  • Most active soy futures up 0.2% at $8.69-3/4 per bushel
  • Most active rice futures up 0.1% at $11.29 per hundredweight

Key African events or data releases today
[Posts & comments at my Twitter handle @DrRafiqRaji]

  • Angola, DRC, Congo & Uganda leaders to meet in Luanda
  • Nigeria’s Buhari to inaugurate new cabinet
  • Sudan’s new joint military & civilian sovereign council to be inaugurated
  • Zambia’s Lungu in India for 3-day state visit
  • South Africa state capture inquiry continues
  • South Africa inflation Jul-19 [fcst. 3.9% yy, prev. 4.5%]

Key African events or data releases yesterday & early a.m today
[Posted & commented on some headlines below at my Twitter handle @DrRafiqRaji]

  • Solar-irrigated farms face an unexpected threat in Zimbabwe: hungry elephants
  • Sudan forms 11-member sovereign council, headed by military leader
  • Southern Somali state shutters main city, airport ahead of election – senior local official
  • More than a hundred migrants feared dead off Libya coast
  • Zambia says no meeting planned with Vedanta over Konkola mine
  • Africa Oil – Nigerian programmes expected as Angolan diffs set to rise
  • Burkina Faso leader laments “dark stain” after attack kills 24 soldiers
  • Egypt security forces kill 11 suspected militants in Sinai
  • South Africa’s rand pauses recent slide, stocks down
  • Zimbabwe opposition to review strategy in face of “political asphyxiation”
  • Cameroon seperatist leaders condemned to life in prison
  • Libya sends mobile petrol stations to conflict-hit west
  • South Africa to consider new nuclear energy in affordable way
  • Egypt’s Banque du Caire expects to seel minority stake by early 2020
  • Cash-strapped South Africa state arms firm ordered to hand over taxes – union
  • Ghana cashes in on slave heritage tourism
  • South Africa’s Harmony Gold eyes potential in AngloGold Ashanti assets
  • South Africa High Court rules against Denel – union
  • Uganda shilling unchanged as commodity flows match importer appetite
  • Qatar to build new port in Somalia’s Hobyo
  • South Africa will look into modular nuclear technology – energy minister
  • Kenya shilling holds steady against the dollar
  • Zimbabwe police deploy hundreds in Gweru, MDC challenges another protest ban
  • Annual earnings at South Africa’s Shoprite miss estimates
  • Vedanta and Zambia President Lungu to discuss KCM in India
  • South Africa’s Harmony Gold full-year earnings rise 19%

N.B. Full stories of above headlines are available on Reuters

#Africa #Markets | 20 Aug

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Asian shares nudge higher on stimulus hopes, recession fears ease
  • Risk aversion eases on stimulus hopes
  • Stocks get a boost, bond yields rebound
  • Chinese shares choppy after loan prime rate cut
  • Traders look to policymakers for stimulus clues

Oil Markets

  • Oil prices slip, but supported by hopes trade tensions could ease
  • OPEC sees bearish oil market for rest of 2019
  • Brent down about 0.1% at $59.71 a barrel (0147GMT)
  • WTI down 0.3% at $56.06

Precious metals

  • Gold firms below $1,500 after slide
  • Spot gold up 0.1% at $1,496.80/oz. (0050GMT)
  • US gold futures down 0.4% at $1,505.90

Grains

  • Corn firms on USDA crop condition report
  • Most active CBOT wheat futures up 0.2% at $4.73-1/4 per bushel (0043GMT)
  • Most active corn futures up 0.6% at $3.76-3/4 per bushel
  • Most active soy futures up 0.4% at $8.70-1/4 per bushel
  • Most active rice futures up about 0.1% at $11.04 per hundredweight

Key African events or data releases today
[Posts & comments at my Twitter handle @DrRafiqRaji]

  • Nigeria’s Buhari retreat for new cabinet; day 2
  • South Africa’s Ramaphosa coordinating council (PCC) inaugural meeting
  • WHO Africa regional conference in Brazzaville; 19-23 Aug
  • South Africa state capture inquiry continues

Key African events or data releases yesterday & early a.m today
[Posted & commented on some headlines below at my Twitter handle @DrRafiqRaji]

  • Regional Somali airport refues to allow Ethiopian plane to land
  • Pompeo, in call with Egypt’s Shoukry, urges political solution in Libya
  • South Sudan president replaces foreign minister
  • At least 10 Burkina Faso soldiers killed in militant attack
  • Police, soldiers patrol Zimbabwe’s Bulawayo as opposition protest thwarted
  • Africa Oil – Angolan preliminary programme shows slight export drop
  • Chad declares state of emergency in 3 regions due to security problems
  • South Africa’s rand falls as investors weigh local, global risks
  • Egypt to reopen historic Baron Empain Palace after $6 mln restoration
  • Egypt sells 610 mln euros in euro-denominated t-bills – central bank
  • Nigeria c.bank to defend reserves in wake of UK $9 bln court ruling
  • Ex-Sudan president got millions from Saudis, court hears
  • Nigerian dealers seek 1-yr t-bills at 14% as naira weakens – traders
  • Tourism revenue in Tunisia grows 44% y/y
  • Sudan’s ousted Bashir told investigators he got millions from Saudi Arabia – court witness
  • UK $9 bln court ruling impacted Nigeria’s monetary policy – cenbank head
  • Nigeria cbank head meets London fund managers – sources
  • At least 19 dead after fuel truck crash in western Uganda – police
  • Uganda shilling unchanged amid sluggish importer demand
  • Ebola spreads to remote, militia-run Congo territory
  • Egypt’s bourse chairman says he expects IPO of private company this year
  • With reservoirs at risk Sierra Leone capital confronts water crisis

N.B. Full stories of above headlines are available on Reuters

#Africa #Markets | 19 Aug

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Asia stocks rise as stimulus, policy hopes calm nervous investors
  • MSCI Asia-Pacific index up 0.25%, Nikkei gains 0.7%
  • Equities up amid hopes for German stimulus, China rate steps
  • Safe-havens such as US treasuries, yen fall back
  • Oil gains along with equities, OPEC still bearish in outlook

Oil Markets

  • Oil rises after Saudi oilfield attack, but recession worries cap gains
  • Yemen’s Houthi drone attack on Saudi oilfield causes gas fire
  • OPEC see bearish oil market for rest of 2019
  • US drillers add oil rigs for 1st week since June – Baker Hughes
  • Brent up 0.8% at $59.09 a barrel (0035GMT)
  • WTI up 0.7% at $55.26

Precious metals

  • Gold prices fall on stronger dollar, equities
  • Spot gold down 0.5% at $1,506/oz. (0114GMT)
  • US gold futures down 0.4% at $1,517.60

Grains

  • Corn prices drop on ample US production
  • Most active CBOT wheat futures down 0.8% at $4.73-1/2 per bushel (0117GMT)
  • Most active corn futures down 1.3% at $3.75-3/4 per bushel
  • Most active soy futures down 0.6% at $8.74-1/2 per bushel
  • Most active rice futures unchanged at $11.20 per hundredweight

Key African events or data releases today
[Posts & comments at my Twitter handle @DrRafiqRaji]

  • Rwanda’s Kagame state visit to Namibia; 19-21 Aug
  • Ghana’s Akufo-Addo to open AfCFTA conference in Accra; 19-21 Aug
  • South Africa’s state capture inquiry resumes
  • Nigeria federal revenue allocation committee meeting

Key African events or data releases over the weekend & early a.m today
[Posted & commented on some headlines below at my Twitter handle @DrRafiqRaji]

  • With reservoirs at risk, Sierra Leone capital confronts water crisis
  • Nigeria awards crude-for-product swap deals to 15 firms
  • Zimbabwe police ban opposition protest planned for Monday
  • Sudan opposition coalition appoints five civilian members of sovereign council
  • Africa development bank says risks to growth ‘increasing by the day’
  • Eastern Libya forces damaged civilian airport in western Libya – UN
  • Egypt’s Sisi promotes Suez deputy chairman to head Canal Authority
  • Sudan army and civilians seal interim power-sharing deal
  • Sudan military names 3 members for sovereign council – Sky News Arabia
  • Libya reopens southern airport closed since 2014
  • Zimbabwe opposition backs down from protest to avoid “blood in the streets”
  • Leader of Kenya drug organization sentenced to 25 years in US
  • UK judge to allow firm to try to seize $9 bln Nigeria assets in gas dispute
  • Ebola spread to new Congo area shows flawed response – aid workers
  • Africa Oil – Angola October programmes begin to emerge
  • China’s Huayou pulls out of Congo cobalt mine investment after price slump
  • South Africa’s 3-mth t-bill average yield slips at 7.13%
  • Nigeria annual inflation at 11.08% in July – stats office
  • Zimbabwe opposition calls off protest after failed court bid to lift ban

N.B. Full stories of above headlines are available on Reuters

macroafricaintel | #Nigeria #Banks – Emefiele 2.0

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

In late June, Godwin Emefiele, governor of Nigeria’s central bank, unveiled a five-year policy roadmap to guide his second 5-year term. Mr Emefiele desires faster economic growth, slower inflation, more non-oil sector output, greater financial inclusion, ample jobs, stronger banks and more private sector credit extension. To these ends, he announced a raft of new regulatory measures in early July.

Nigerian banks would be required to maintain a minimum loan-to-deposit ratio (LDR) of 60% by end-September. The LDRs would be reviewed quarterly afterwards. In the computation of the LDR, a greater weighting of 150% would also now be assigned to lending to small and medium-sized firms, and that for retail, mortgage and consumption purposes. Should a bank not meet these new criteria, half of the shortfall would be parked at the central bank by way of an additional cash reserve requirement.

The central bank also announced modalities for a single-digit long-term financing initiative for the information technology, movie, and fashion sectors. To engender greater financial inclusion and meet its 80% target by 2020, banks are also now not required to seek prior regulatory approval to offer mobile money services.

Of much interest is the CBN’s recapitalisation drive for banks. While the new minimum capital threshold is yet to be announced, Mr Emefiele’s ambition of having Nigerian banks amongst the top 500 global banks suggests it might be high indeed. What do analysts and portfolio investors think? I asked Malte Liewerscheidt of Teneo, a consultancy in London and Wale Okunrinboye, head of investment research at Sigma Pensions in Lagos.

Malte Liewerscheidt, vice president at Teneo
By advancing new measures, pushing banks to extend their lending activities, the CBN is filling the policy void in the prolonged absence of a new cabinet. Unfortunately, neither the new minimum loan-to-deposit ratio nor the reduced maximum amount for which banks will receive interest on their deposits with the CBN change the underlying conditions that make it unattractive for banks to lend in the first place. In fact, the CBN’s obsession with the exchange rate has led the apex bank to sell more and more OMO securities that offer a high-yield, risk-free alternative for banks, effectively preventing them from handing out more loans to the real economy.

Wale Okunrinboye, CFA, head of investment research at Sigma Pensions
I found the substance of the plan a little unchanged from his inaugural statement in 2014: bold and ambitious about his desires but without the recommended dose of realism that Nigeria’s increased vulnerability to external shocks require. The plan seeks to pursue single digit inflation, high growth and increased banking sector involvement with the economy but makes little mention as to likely trajectory of the key policy anchor (the exchange rate). In line with historical trends, the exchange rate is the eternal obsession of the CBN and one which assumed a larger than life status under his first term.

At the heart of the present FX strategy is a play on offering a high interest rate differential on OMO bills to foreign portfolio investors to shore up the NGN at its increasingly over-valued level. This tactic, which is not a radical departure from policy under Sanusi, is essentially an enlarged bet that external conditions remain benign (dovish Fed + above $60/bbl oil price) over the medium term. That said, the quantum of these FPI inflows into short dated CBN T-bills (>$16b) have become significant relative to FX reserve levels ($45b) which means that any adverse change on the external front would easily derail the plan.

On growth and inflation, to drive a large expansion in the former, we need to see some sizable fiscal policy adjustments which may be potentially inflationary ( flexibility around fuel and electricity prices) and will work to limit the scale of any dovish monetary policy aspirations. Not doing them means economic growth remains at this ‘ijebu’ 2 percent level.

Lastly, just as we are now used to multiple exchange rates, I think we are likely to increasingly see multiple interest rates (one based on CBN intervention funds and another based on market conditions). In all my thoughts are we are likely to see greater unorthodoxy in the event of an unfriendly external environment: not that orthodox solutions offer much hope when fiscal policy makers are not sincere about reforms but an orthodox approach assures on the credibility of CBN forward guidance which markets require.

#Africa #Markets | 16 Aug

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Asia stocks take heart in stimulus speculation
  • China touts plan to boost disposable incomes
  • Speculation grows of aggressive central bank easing
  • Bonds hold huge gains, more yield curves invert
  • Euro dragged as ECB’s Rehn flags Sept move

Oil Markets

  • Oil gains after strong US retail sales help ease recession worries
  • Brent up 0.5% at $58.54 per barrel (0047GMT)
  • WTI up 0.8% at $54.90

Precious metals

  • Gold heads for 3rd weekly gain on trade, growth concerns
  • Gold up 1.6% so far this week
  • Silver set for second week of gains
  • Gold may fall into $1,483-$1,503/oz range – techs
  • Spot gold down 0.1% at $1,521 per ounce (0400GMT)
  • US gold futures steady at $1,523.1/oz

Grains

  • Corn set for biggest weekly loss in 3yrs on US crop outlook
  • Most active CBOT wheat futures up 0.4% at $4.70-3/4 per bushel (0116GMT)
  • Most active corn futures up 0.7% at $3.73-1/2 per bushel
  • Most active soy futures up 0.6% at $8.75-3/4 per bushel
  • Most active rice futures down 0.1% at $11.31 per hundredweight

Key African events or data releases today
[Posts & comments at my Twitter handle @DrRafiqRaji]

  • South Africa’s Ramaphosa in Tanzania for state visit; ahead of SADC summit during the weekend
  • South Africa state capture inquiry continues
  • Zimbabwe opposition protest today
  • Nigeria inflation Jul-19 [fcst. 11.2% yy, prev. 11.2%]

Key African events or data releases yesterday & early a.m today
[Posted & commented on some headlines below at my Twitter handle @DrRafiqRaji]

  • Zimbabwe bans opposition demonstrations, police on high alert
  • Sudan opposition to nominate economist Abdalla Hamdok as PM – sources
  • South African rand bounces back after steep sell-off
  • Africa Oil – Angolan programmes expected as diffs for last cargoes fluctuate
  • Vodacom to invest more than $589 mln on South Africa network this year
  • South Africa retailer TFG to review Kenya, Ghana stores
  • Death toll from Tanzania fuel tanker blast climbs to 85, official says
  • South Africa’s Harmony Gold expects higher annual profit
  • Libya – Missile strike halts traffic at Tripoli airport, kills worker
  • Zimbabwe rights groups say 6 activists abducted, beaten ahead of protests
  • Kenya set for first crude oil exports after striking ChemChina deal
  • Nigeria central bank eyes second debt sale in a week to lure foreign investors
  • Sudan opposition to nominate economist Abdalla Hamdok for PM
  • Nigeria central bank to auction 150 bln naira of t-bills – traders
  • Kenya, Tanzania shillings, Zambia kwacha to hold steady
  • South Africa public protector hit with second punitive costs order
  • Uganda central bank holds key lending rate, credit growth to support economic expansion
  • Uganda shilling steady after central bank key rate decision
  • South Africa debt “becoming uncomfortable”, but no bailout requested – IMF
  • Kenya’s KCB Group confident of sealing NBK deal as H1 rises
  • Uganda central bank holds its key lending rate at 10%
  • Egypt’s top cigarette maker raises prices
  • South Africa – Implats expects annual profit helped by metals prices
  • Uganda’s cash-strapped cops spend $126 mln on CCTV from Huawei
  • South Africa’s Gold Fields swings to first-half profit
  • Kenya’s KCB Group first-half pretax profit rises 5%

N.B. Full stories of above headlines are available on Reuters