#Africa #Markets | 16 Jul

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Asian shares inch up as cautious investors await US data, earnings
  • MSCI Asia ex-Japan +0.17%; Nikkei -0.74%
  • US retail sales data in focus
  • Citigroup interest margin decline highlights headwinds for banks

Oil Markets

  • Oil down for a second day as US Gulf of Mexico output returns
  • Brent down 0.2% at $66.38 a barrel (0028GMT)
  • WTI down 0.2% at $59.48

Precious metals

  • Gold steady as investors eye US retail sales data
  • Markets price in 25bp cut by the US Fed
  • Platinum hovers near a 2-mth high
  • Spot gold remains neutral in $1,404-$1,421/oz range – techs
  • Spot gold up 0.1% at $1,415.19 per ounce (0521GMT)
  • US gold futures up 0.2% at $1,416.60 an ounce

Grains

  • Corn eases 1% as USDA tempers fears over crop condition
  • Most active CBOT wheat futures down 0.6% at $5.04-1/2 per bushel (0043GMT)
  • Most active corn futures down 0.9% at $4.43 per bushel
  • Most active soy futures down 0.6% at $9.14-1/2 per bushel
  • Most active rice futures down 0.4% at $11.84 per hundredweight

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

  • Kenya trade week 2019 in Nairobi; 15-21 Jul
  • South Africa state capture inquiry continues; Zuma to continue testimony
  • South Africa PIC inquiry continues
  • Gambia’s Barrow in UAE for 3-day state visit
  • Afro-Asia fintech festival in Nairobi, Kenya; day 2
  • Nigeria presidential election petitions tribunal continues

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

  • Nigeria’s state oil firm awards oil-for-fuel swap deals – sources
  • Africa Oil – Traders await September programmes
  • Egypt revamps law curbing NGOs, critics unimpressed
  • South Africa’s rand, stocks boosted by global risk-on settlement
  • Egypt opens musuem commemorating Nobel laureate Naguib Mahfouz
  • Libya’s H1 oil revenue dips to $10.2 bln
  • Ethiopia premier’s aide named to lead restive Amhara region
  • Ebola spread to east Congo’s Goma massively raises risk – UN
  • Algeria suspends grain agency head in corruption probe – govt sources
  • Abruptly appointed Zambia finance minister to review sales tax plan
  • Defiant at inquiry, South Africa’s Zuma denies breaking law with business
  • Zimbabwe inflation almost doubles, stirring memories of economic chaos
  • With hip hop and bumper home loans, big banks target South Africa’s youth
  • Zambia dollar bonds soar after president swaps finance minister
  • Algeria suspends grains agency head over corruption allegations – govt sources
  • Nigeria consumer inflation falls to 11.22% in June – stats office
  • Treasurer of South Africa’s Eskom quits in latest high-profile departure
  • Jailed Zimbabwe lawmaker facing subversion charges freed on bail
  • South Africa’s Zuma denies having broken law with Gupta family
  • UN calls for hundreds of millions in more aid to fight ebola
  • EM debt soars to record $69.1 trln in Q1 on falling interest rates – IIF
  • Uganda shilling unchanged as tax payments trims demand
  • South Africa’s Zuma tells corruption inquiry there is conspiracy against him
  • 2 ebola health workers killed in eastern Congo
  • Zimbabwe’s annual inflation hits 10-yr high of 175.66%
  • Zambia president removes finmin, appoints central bank deputy governor

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

#Africa #Markets | 15 Jul

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Asian shares pull ahead after encouraging Chinese data
  • MSCI ex-Japan reverse losses; Chinese, HK shares bounce off lows
  • MSCI ex-Japan fell 1% last week after 5 straight weekly gains
  • Chinese Q2 GDP in-line with consensus, monthly activity data upbeat
  • Morgan Stanley says re-enters short USD/JPY trade

Oil Markets

  • Oil prices edge down ahead of expected weak China data
  • Concerns of slowing China growth weigh on oil prices
  • Storm cuts Gulf of Mexico output by 73% – US govt
  • Brent down 6 cents at $66.66 a barrel (0022GMT)
  • WTI down 5 cents at $60.16

Precious metals

  • Gold trades steady ahead of China GDP data
  • Spot gold flat at $1,415.34 per ounce (0100GMT)
  • US gold futures up 0.3% at $1,416.50/oz

Grains

  • US corn jumps 1% to hit 5-yr high; soy firms
  • Most active CBOT wheat futures up 0.4% at $5.25 per bushel (0002GMT)
  • Most active corn futures up 1.2% at $4.64-3/4 per bushel
  • Most active soy futures up 0.5% at $9.36 per bushel
  • Most active rice futures down 0.1% at $11.89 per hundredweight

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

  • South Africa state capture inquiry resumes; former president Zuma to testify
  • South Africa PIC inquiry resumes
  • Gambia’s Barrow in UAE for 3-day state visit
  • Afro-Asia Fintech Festival in Nairobi, Kenya; Kenyatta & Njoroge attending
  • Nigeria inflation Jun-19 [fcst. 11.1% yy, prev. 11.4%]

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

  • As fuel prices rise, firewood rustlers vex rural Kenya
  • Why the cobalt market needs Congo’s “illegal” miners: Andy Home
  • Sudan man shot dead during protest as sides wrangle over transition
  • First ebola case in Congo city of Goma detected
  • Burundi names head of ruling party militia to lead state broadcaster
  • Kenyan blames high-doping offence figures on participation numbers
  • Tanzania’s central bank sacks CEO of state-run bank
  • Final death toll in boat migrant accident off Tunisia rises to 82
  • Thousands demonstrate in Sudan to mark 40 days since deadly crackdown
  • Egypt opens Sneferu’s “Bent” Pyramid in Dahshur to public
  • Tanzania says elephant, rhino populations rebounding after anti-poaching crackdown
  • South Africa confirms plans to block extradition of ex-Mozambique finmin
  • Tanzania central bank fines lender for breaching rules
  • Zimbabwe hikes fuel price again after minister says it’s still cheap
  • Somalia security forces end militant attack on hotel that killed 13 – police officer
  • Algerian protesters push for reforms, man tries to burn himself
  • Congo Republic IMF deal expected to unlock $2 bln in AfDB funds
  • Morocco’s budget deficit grows to 21.8 bln dirhams in first half
  • Africa Oil – Total awarded IOC tender with Suezmax
  • Kenya betting firms say payment systems suspended following govt order
  • More bodies found in Tunisia migrant ship sinking feared to have killed more than 80
  • Ivory Coast bitumen maker SMB expects to double sales in 2 years
  • Italy court says Eritrean in migrant case was victim of mistaken identity
  • Congo rules out using additional trial vaccines to combat ebola
  • South Africa to deploy army to quell violent crime in Cape Town
  • Uganda shilling flat amid limited offshore investor flows
  • Kenya shilling expected to weaken due to importer demand, excess liquidity
  • UN chief calls for more support for cyclone-hit Mozambique
  • South Africa court finds Zuma’s son not guilty over car crash death
  • South Africa’s Sasol opens new chemical plant in east China

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

macroafricaintel | African SEZs & GVCs in the age of automation (3)

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

I write a monthly research paper series for NTU-SBF Centre for African Studies at Nanyang Business School in Singapore. The following is the third and final part of the highlights of the issue published in June 2019.

Way forward
China, India and other Asian countries are already entrenched in global value chains. Automation might have completely diminished the opportunity for the migration of labour-intensive manufacturing to Africa by the time the continent deals with its competitiveness challenges. Thus, over time, there would increasingly be less scope for African SEZs to participate in GVCs. All is not lost, however. Domestic markets would still be able to accommodate some types of manufactured goods.8 The most attractive sectors are ideally “consumer-facing” and “infrastructure-related”.12 With a projected revenue increase of $122 billion over the next decade, agro-processing is one.12 Cement production and clothing and footwear, with projected revenue increases of $72 billion and $27 billion over the next decade respectively, are also thought to be attractive.12 Automobiles and consumer goods are promising manufacturing subsectors as well.11 And depending on the ambitions of the manufacturers and prevailing trade dynamics, these ventures could be extended region-wide or across the continent. Thus, the primary objective of African SEZs should now be to engender intra-African trade.17 They could also be used as reform labs, like China and closer to home, Mauritius, have done.17 Clearly, local firms would be crucial to such a strategic re-orientation. African SEZs should thus see local firms as their primary targets.

Use SEZs as reform labs
The concept of an “Early Reform Zone” (ERZ) is proposed.8 ERZs are designed to be oases of sanity in typically dysfunctional economies. So, whereas firms in the broader economy might suffer from a lack of quality infrastructure, red tape, and myriad challenges, ERZs circumvent all these. The so called “second-generation” SEZs differ from the first-generation ones along the following lines. They are not subsidized, thus not as capital-intensive as their forebears.8 And since they are literally designed to be permanent, there is no time pressure.8 Another key distinction of ERZs is speed. ERZs almost momentarily create the conditions for firms to be globally competitive within a specific geographic area in an otherwise distorted economy.8

Build strong linkages with the local economy
As opposed to the current practice of targeting foreign investment, African SEZs should increasingly look towards domestic firms. It is not a novel idea. Local firms have over time come to dominate SEZs in Malaysia, Korea, and Mauritius.17 It has also recently been observed to be the case in China.17 Emerging Asian countries like Bangladesh and Vietnam are also beginning to record a higher level of participation by local investors in their respective special economic zones.17 This has not been found to be the case in many African countries, at least not materially as yet.13 It explains their underperformance in part. Foreign firms can be fickle.5 And once they leave, without having already been integrated with local firms, with the expected attendant knowledge and technology transfer, they depart with the envisaged advantages of attracting them in the first place.

Nonetheless, African SEZs have primarily been designed to be “enclaves” for foreign investors.15 In light of evidence, in East Asia, for instance, that show a strong correlation between SEZ performance and linkages to the local economy, African zones would be well-advised to do the same.15 This could be done through deliberate local content policies by governments. Joint ventures with local firms are also another way to achieve this.15 That said, the ease of collaboration between foreign and domestic firms has been found to be dependent on sector dynamics.14 In other words, local firms might be better collaborators and participants in the value chain of a less complicated sector like agriculture but not in ones that require greater technological know-how, for instance.14

Plug into intra-African GVCs
Automation and Industry 4.0 suggest Africa’s place in global value chains, not remarkable at the moment in any case, may be non-existent if and when it finally gets its act together. This is because GVCs themselves might have become obsolete by then, with production and consumption becoming domestic or regional.10 In any case, there is already an opportunity to develop regional GVCs via the respective regional customs unions on the continent. And with the African Continental Free Trade Agreement (AfCFTA) now to be operationalized, there is a broader continental opportunity.

References
See parts (1) & (2)

#Africa #Markets | 12 Jul

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Asian shares dart between gains and losses before key China data
  • MSCI Asia ex-Japan up 0.1%
  • China June trade, lending data due Friday, Q2 GDP due Monday
  • Trump says China not living up to promises

Oil Markets

  • Oil prices rise amid Gulf of Mexico storm, Middle East tensions
  • Brent up 0.6% at $66.89 (0115GMT)
  • WTI up 0.6% at $60.54

Precious metals

  • Gold gains on US-China trade jitters, rate cut hopes
  • Spot gold up 0.4% at $1,408.62/oz (0133GMT)
  • US gold futures up 0.2% at $1,410/oz

Grains

  • Wheat falss but set for first weekly gain in a month
  • Most active CBOT wheat futures down 0.1% at $5.20-3/4 per bushel (0255GMT)
  • Most active corn futures unchanged at $4.48 per bushel
  • Most active soy futures nearly unchanged at $9.17 per bushel
  • Most active rice futures down 0.3% at $11.90 per hundredweight

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

  • 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]

  • IMF approves $449 mln Congo Republic bailout after China debt deal
  • Families and Ethiopian farmers feel in the dark over Boeing’s aid offer
  • Sudan’s military rulers say coup attempt thwarted
  • Egypt detains man behind pro-Mubarak Facebook page
  • South Africa’s Eskom new funding bill expected July 23
  • Death toll in migrant ship disaster off Tunisia coast rises to 58
  • Egypt central bank keeps key rate unchanged
  • UN chief calls for more support for cycolone-hit Mozambique
  • Nigeria to force lending by capping deposits at central bank
  • Africa Oil – Nigerian July spot cargoes remain, traders report Saturno outage
  • South African Airways chairman has quit – minister Gordhan
  • South African rand stronger with Fed seen cutting rates
  • Zimbabwe lawmaker to spend more time in detention after court appearance
  • Go-slow at port hits South African car and commodity exports
  • OPEC sees lower 2020 demand for its oil, points to surplus
  • Kenya’s NSE kicks off futures trading with most liquid stocks
  • Tanzania says does not know whether missing journalist is dead or alive
  • South Africa’s manufacturing, mining subdued as growth burden shifts to central bank
  • Police fire guns during Shi’ite protest in Nigerian capital – witness
  • South Africa’s Nampak has made significant progress in talks for glass unit sale
  • South Africa’s manufacturing up 1% y/y in May
  • Uganda shilling steady, importer demand low
  • Kenya orders Safaricom to shut down betting payments in revenue blow
  • Egypt’s arrears to foreign oil firms fall by end of June – minister
  • Kenya shilling under pressure against the dollar

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

#Africa #Markets | 11 Jul

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Asia stocks gain, dollar drops as Fed chair sets stage for rate cut
  • MSCI Asia-Pacific index up 0.75%, Nikkei adds 0.35%
  • Fed chair remarks revive some bets on aggressive rate cut
  • Dollar & US treasury yields sag after Powell comments
  • Crude prices hit 7-wk highs

Oil Markets

  • US oil hits highest in over a mth amid Gulf of Mexico storm, Iran tensions
  • Brent down 5 cents at $66.96 a barrel (0055GMT)
  • WTI up 11 cents at $60.54

Grains

  • Soybeans fall from 10-day high ahead of USDA report
  • Most active CBOT soybean futures down 0.1% at $9.12 a bushel (0122GMT)
  • Most active corn futures down 0.3% at $4.38 a bushel
  • Most active wheat futures down 0.2% at $5.03-1/4 a bushel

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

  • IMF board to consider Congo Republic bailout
  • South Africa treasury budget vote speech by finmin Mboweni
  • Africa counter-terrorism conference in Nairobi, Kenya; day 2
  • South Africa state capture inquiry continues
  • Nigeria’s Buhari cabinet appointment awaited
  • South Africa mining production May-19 [fcst. -4.5% yy, prev. -1.5%]
  • South Africa manufacturing production May-19 [fcst. 2.1% yy, prev. 4.6%]

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

  • Algeria parliament elects opposition figure as chairman after protesters
  • Morocco approves law on sharia-compliant insurance
  • Ivory Coast, Ghana add ‘living income’ cocoa premium to fight poverty
  • South African minister Gordhan challenges public protector report
  • Africa Oil – Angolan cargo deferred, Pertamina tender awarded
  • ANC infighting has hurt South African state asset manager – former CEO
  • Egypt opens new international airport for trial period
  • Algeria’s ex-industry minister detained over alleged graft – state TV
  • Significant risks for South Africa’s economic outlook – Treasury
  • South Africa’s rand firms on Powell’s remarks, Kganyago reappointment
  • Zimbabwe opposition lawmaker to appear in court away from capital
  • South Africa’s Kganyago reappointed as central bank governor for another 5 years
  • Morocco’s Platinum Power partners with China’s CFHEC on $300 mln
  • Greater response needed to worsening West African violence – UN head
  • Somalia executes 3 al Shabaab members over 2017 hotel attack
  • In hotbed of Sudan’s uprising, activists torn over transition deal
  • Tanzania says elephant, rhino populations rebounding after anti-poaching crackdown
  • Nigeria’s president may name cabinet nominees this week – senate leader
  • Egypt headline inflatioin falls to surprising 9.4% in June
  • Morocco prepares to launch tender for 230MW plant in Atlas mountains
  • President urges Tanzania’s women to “set ovaries free”, have more babies to boost economy
  • Ivory Coast cocoa grind up 7.3% through June – exporters
  • Uganda shilling firms, helped by commercial banks selling dollars
  • Libya – Bombed Tripoli migrant detention centre being emptied – UN
  • France says anti-tank missiles found in Libya were “unusable”
  • Kenya shilling steady against dollar, remittances help
  • ArcelorMittal South Africa to cut more than 2,000 jobs, shares drop
  • Tunisia starts marketing 7-yr euro-denominated bond
  • Egypt digital payments company Fawry preparing for IPO

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

#Africa #Markets | 10 Jul

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Asia shares cautious in case Powell closes rate door
  • Asian shares mixed in quiet trade
  • Bull hope Fed Chairman Powell will sound dovish enough
  • Dollar supported as Treasury yields edge up from lows
  • Oil prices up as US stockpiles fall

Oil Markets

  • Oil rises more than 1% after US stockpile drop; Brent nears $65
  • Brent up 1.1% at $64.85 per barrel (0027GMT)
  • WTI up 1.5% at $58.73

Precious metals

  • Gold dips as dollar ticks higher, all eyes on Fed
  • Spot gold down 0.4% at $1,391.98 per ounce (0103GMT)
  • US gold futures down 0.4% at $1,394.40 an ounce

Grains

  • Corn falls 1% to 1-wk low on easing yield worries
  • Most active CBOT wheat futures down 0.7% at $4.99-1/2 per bushel (0212GMT)
  • Most active corn futures down 1% at $4.33 per bushel
  • Most active soy futures down 0.3% at $9.01-1/2 per bushel
  • Most active rice futures down 0.4% at $11.84 per hundredweight

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

  • South Africa state capture inquiry continues
  • South Africa PIC inquiry continues

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

  • Morocco revises 2019 growth forecast down to 2.7%
  • Libya – At least 100 migrants walk free from shelled detention cente in Tripoli
  • South Sudan court rules against of marriage of girl, 16, in landmark case
  • Zimbabwe public workers reject $21 mln pay rise
  • Moroccan jailed by Portugal for recruiting for Syrian war
  • Nigeria parliament on lockdown after clash with Shi’ite group
  • Nigerian Shi’ite group say police shot at them outside parliament
  • Africa Oil – Diffs supported by firmer gasoline margins
  • South Africa’s rand steady as traders eye Fed, stocks down
  • South African platinum firms kick off wage talks
  • Some internet service restored in Sudan after court ruling
  • Zimbabwe lawmaker charged with subversion over Mnangagwa threat
  • Airtel Africa lists in Nigeria
  • Determined to reach Europe, migrants defy Morocco’s crackdown
  • South African central bank stresses importance of independence
  • Kenya shilling firms, helped by investors buying bonds

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