#Africa #Markets | 20 Feb

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Asian stocks slip after European surge fades, dollar edges up
  • MSCI Asia-Pacific index falls 0.5 pct, Nikkei drops 1.25 pct
  • European stocks dip overnight, US markets closed Mon for holiday
  • Crude reaches 2-wk highs amid Middle East tensions, gold steady

Oil Markets

  • Oil markets mixed on lower Canadian flows, firmer dollar
  • US crude futures rise on reduced Canadian oil flows
  • Firmer dollar dents international Brent crude
  • Overall markets well supported by ongoing OPEC production cuts
  • US WTI crude futures up 0.8 pct at $62.16 per barrel (0153GMT)
  • Brent crude futures down 0.7 pct at $65.23 per barrel

Precious metals

  • Gold prices inch down as dollar strengthens
  • Spot gold down 0.2 pct at $1,343.22 an ounce (0112GMT)
  • US gold futures down 0.8 pct at $1,345.70

Grains

  • Soybeans firm 1 pct to 7-month high
  • Most active CBOT wheat futures up 0.7 pct at $4.60-3/4 a bushel (0113GMT)
  • Most active corn futures up 0.3 pct at $3.68-1/2 a bushel
  • Most active soybean futures up 1 pct at $10.31-1/2 a bushel
  • Most active rice futures down 0.2 pct at $11.99 per hundredweight

Soft commodities (19 Feb)

  • White sugar prices edge up, robusta falls to 2-week low
  • May white sugar ended 1.3 pct higher at $361.50 per tonne
  • May robusta coffee ended down 0.7 pct at $1,741 a tonne
  • May London cocoa ended 0.2 pct lower at £1,504 a tonne

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

  • South Africa’s new president Cyril Ramaphosa to respond to yesterday’s debate of his State of the Nation Address (SONA) in parliament
  • Zimbabwe opposition leader Morgan Tsvangirai to be interred today
  • East African Community (EAC) heads of state summit tomorrow


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

  • Kenya opposition politicians stopped from leaving the country – Odinga adviser
  • Egyptian firm to buy $15 billion of Israeli natural gas
  • Nigeria convicts 205 Boko Haram suspects in mass trials
  • Nigeria to sell assets seized in anti-graft probes to boost treasury, president says
  • Togo charity wins award for improving access to safe drinking water
  • Uber suspends services in Morocco after two years
  • More than 300 migrants intercepted in boats off Libya – coast guard
  • South Sudan rebels free Kenyan pilots after compensation paid
  • Thousands in Zimbabwe bid farewell to “People’s General” Tsvangirai
  • Without city jobs, tech-savvy Kenyan youth ahead back to the farm
  • France assails Equatorial Guinea claim of immunity of Obiang’s son in graft case
  • South African rand weaker ahead of budget, stocks lower
  • Fitch says Zuma resignation reduces South Africa “policy paralysis risk”
  • Atul Gupta challenges South African asset freeze
  • Ivory Coast hires banks for eurobond
  • Pope backs down after defending Nigerian bishop rejected by locals
  • Mauritius 91-day treasury bills yield rises to 2.81 pct
  • South Africa’s Competition Commission recommends deal allowing Total SA to buy Gulfstream Energy
  • At least 17 killed in Mozambique capital as pile of garbage collapses
  • Kenya’s KenGen says to add extra 1,745MW to grid by 2025
  • Aker Energy buys Hess Ghana business, expects first oil in 2021
  • South African budget to set out “tough” measures to repair post-Zuma economy
  • Nigeria to announce refinery investors in coming month – oil minister
  • New South African leadership credit positive for gold miners – Moody’s
  • Malawi’s tea output up 6 pct in 2017
  • Ugandan shilling steady, tax payments squeeze dollar demand
  • Malawi cholera cases pass 500, eight people dead
  • Kenyan shilling stable against the dollar
  • Egypt says 3 soldiers killed in campaign against militants
  • Offshore investors net buyers of South African stocks, bonds

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

#Global #Markets | 20 Feb

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Time Data/Event Previous Consensus
0700GMT Germany PPI YoY JAN 2.3% 1.9%
0700GMT Germany PPI MoM JAN 0.2% 0.3%
1000GMT Euro Area ZEW Economic Sentiment Index FEB 31.8 28.4
1000GMT Germany ZEW Economic Sentiment Index FEB 20.4 16
1100GMT UK CBI Industrial Trends Orders FEB 14 10
1500GMT Euro Area Consumer Confidence Flash FEB 1.3 1

macroafricaintel | Funding Ramaphosa’s plan

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

See you again somewhere”. This was likely outgoing finance minister Malusi Gigaba’s response to a reporter’s question about whether he would be delivering the 2018 budget speech on 21 February. In my Premium Times column ahead of President Cyril Ramaphosa’s maiden State of the Nation Address (SONA) titled “Ramaphosa’s priorities” (see link viz. https://opinion.premiumtimesng.com/2018/02/16/ramaphosas-priorities-by-rafiq-raji/), I advised that he should be replaced. Opposition Economic Freedom Fighters (EFF) leader Julius Malema was not as polite: “The first thing he needs to do is fire Malusi Gigaba we can’t have a delinquent as minister.” Market participants would almost certainly be more than a tad disappointed if Mr Gigaba delivers the budget speech on Wednesday. Although the notice is short, it is important that just as there is now a breath of fresh air in the Union Buildings, there should be similar freshness at the Treasury. Mr Ramaphosa’s “new era” requires that someone similarly well-tested takes the reins at the finance ministry. Besides, the plan announced by the president in his SONA almost certainly means the budget that was being prepared while former president Jacob Zuma was still in charge, needs to be revised significantly, if not rewritten from scratch.

Many promises, little money
Mr Ramaphosa’s excellent speech last week touched on key issues like jobs, local content, digitization of industry, and so on. These were, however, just high level highlights with little detail. Thus, coming just about a week afterwards, the budget is an opportunity for the fiscal authorities to elaborate more on the president’s vision; an action plan, so to speak. This is important because after Mr Ramaphosa’s widely-applauded speech, questions were raised about how he planned to fund his new initiatives. Mmusi Maimane, leader of the main Democratic Alliance (DA) opposition party, put it rather well: Mr Ramaphosa gave “a speech filled with a lot of promise but as we would see in the budget…very few amount of money to implement”. New proposals like the paid internship programme and small business and innovation fund would have to be budgeted for certainly; that is, if the new president wants to maintain his credibility. Never mind that it remains to be seen how the similarly recent free higher education policy would be financed. It would also be interesting to see how much of the proposed efficiencies, like reducing the number of government agencies and streamlining procurement procedures, would be actioned.

Raise taxes, sell SOEs, lose weight
To put the authorities’ finances back in shape, some tough measures would be required. So, earlier assertions by Mr Gigaba like there being no need to raise the value added tax (VAT) to fund free higher education is simply wishful thinking. In any case, he was probably playing to the gallery. Public debt is already about 54 percent of GDP (2017/18) and expected to be over 60 percent in a couple of years. Debt servicing is expected to be about 15 percent of revenue by 2019/20, from 13 percent most recently; and should rise over the next 3 years by about almost the same rate of 11 percent. Clearly, additional borrowing to make up for projected revenue shortfalls of R50.8 billion in 2017/18, R69.3 billion in 2018/19 and R89.4 billion in 2019/20 would be antithetical to the almost existential need for fiscal consolidation. At the very least, the debt level must be kept below 60 percent of GDP to avoid a crisis. In the medium-term budget policy statement (MTBPS) in October, the Treasury estimated spending cuts or tax hikes of about 0.8 pct of GDP would be required to achieve this goal; about R40 billion for 2018/19. So the issue is not so much about whether there would be tax hikes but how much. In any case, new money could also be found from selling inefficient state-owned enterprises; of which there are quite a few. Besides, there is still much more that could be done to cut costs. The cabinet and public service are bloated, for instance. All in all, my forecast for the budget deficit over the next three fiscal years is about 4 percent of GDP; which would still be an improvement from the revised expected outcome of 4.3 percent for the 2017/18 fiscal year.

Find growth
In the October MTBPS, Mr Gigaba highlighted key fiscal risks to be further revenue shortfalls, compensation budgets, rising debt service costs, funding gaps in infrastructure and social services, and financial deteriorations. As commodity prices have been ascendant lately, there could be some improvement in revenue, at least. Even so, the economy would need to start firing from all cylinders to speed up lacklustre growth in recent years. At below 1 percent in 2017 and likely just a little above that this year, there are limitations to how much more taxes can be extracted without some incremental economic growth. Mr Ramaphosa has identified mining, agriculture and tourism as the sectors to provide additional output. But even if he backs his positive rhetoric with action like one expects, it would take some time before the gains materialize.

Also published in my BusinessDay Nigeria newspaper column (Tuesdays). See link viz. http://www.businessdayonline.com/funding-ramaphosas-plan/

#Africa #Markets | 19 Feb

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Asian shares extend global recovery, volatility subsides
  • Cheaper valuations, calmer volatilities boost sentiment
  • Dollar weak; some cite US trade, budget deficits as factors

Oil Markets

  • Oil hits highest in nearly 2 weeks on Asian equity recovery
  • Some focus turns to Israel-Iran tensions
  • WTI gains more than 1 pct, highest since Feb.7
  • US WTI crude for March delivery up 1.2 pct at $62.41 a barrel (0600GMT)
  • London Brent crude up 0.8 pct at $65.36 a barrel

Precious metals

  • Gold prices inch up on weaker dollar
  • Spot gold up 0.2 pct to $1,350.51 an ounce (0120GMT)
  • US gold futures down 0.2 pct to $1,353.10 an ounce

Grains (16 Feb)

  • US soy falls on profit-taking; corn, wheat also weak
  • CBOT March soybean futures ended down 2-3/4 cents at $10.21-1/2 a bushel
  • March corn futures were ¼ cent lower at $3.67-1/2 a bushel
  • March soft red winter wheat fell 4 cents to $4.57-3/4 a bushel

Soft commodities (16 Feb)

  • Arabica coffee dives to 2-month low as charts weaken
  • May arabica coffee settled down 3 pct at $1.2045 per lb
  • May robusta coffee settled down 1.6 pct at $1,754 per tonne
  • May New York cocoa closed flat at $2,134 a tonne
  • May London cocoa settled up 0.4 pct at £1,507 per tonne
  • May raw sugar settled down 1.7 pct at 13.28 cents per lb
  • May white sugar settled down 1.2 pct at $356.80 per tonne

Key African events or data releases today

[Posts & comments at my Twitter handle @DrRafiqRaji]

  • South Africa’s parliament to debate President Ramaphosa’s SONA today
  • Former Zimbabwean opposition leader Morgan Tsvangirai to be buried in his village today
  • South Africa Ramaphosa’s deputy president pick & imminent cabinet reshuffle expected from today

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

  • Congo’s cobalt hopes risk the same ruinous road as Thai rice: Russell
  • Gambia announces moratorium on death penalty
  • South Africa government, mining group agree to postpone court challenge
  • Nigeria releases 475 Boko Haram suspects for rehabilitation
  • Egypt to import 3 LNG cargoes from France’s Engie for Q2 2018 – sources
  • NBA-Basketball’s Africa Game returns to South Africa in August
  • Ethiopia says state of emergency will last six months
  • US says it “strongly disagrees” with Ethiopia’s state of emergency
  • Zambia to rearrange China loans to meet IMF conditions
  • Burundians forced to sign up to vote in referendum, opposition says
  • Ethiopia bans protests, publications that incite violence during emergency rule
  • Ethiopia declares state of emergency after PM’s resignation
  • Three suicide bombers kill 18 people in northeast Nigeria’s Maiduguri – police
  • Nigeria cinema fans celebrate ‘Black Panther’ release
  • Moody’s affirms Ghana’s B3 rating, maintains stable outlook
  • S&P says Rwanda ‘B/B’ ratings affirmed outlook stable
  • South Africa’s Ramaphosa hails “new dawn”, warns of tough decisions
  • Gabon seizes Veolia’s SEEG water and power unit
  • “Tough decisions” for South Africa to cut deficit – Ramaphosa
  • Eyes on South African finmin Gigaba amid talk of cabinet reshuffle before budget
  • Acacia Mining says valuing Tanzania mines for possible sale
  • Tunisia phosphate exports halted by job protests
  • Ghana’s 91-day bill yield dips to 13.34 pct
  • At least 18 killed in clash in northwest Nigeria – police
  • South Africa’s Gigaba says country must ride positive market sentiment
  • Sierra Leone voters tune in for rare presidential debate
  • Congo says six soldiers killed in clash with Rwandan army
  • Ajay Gupta, proved over Zuma ties, left South Africa for Dubai on Feb. 6 – airport
  • Zambia dollar bonds fall after IMF rejects borrowing plans
  • Malawi to cut borrowing, aims to grow economy by 7 pct – finmin
  • Mozambique’s inflation slows to 3.84 pct y/y in January
  • Eskom executive Koko resigns from South African power utility
  • IMF dismisses Zambian borrowing plan, putting loans on hold
  • Barclays Africa wins case over $83 million payout in South Africa
  • South Africa’s 3-mth t-bill average yield falls to 7.21 pct
  • South Africa’s Competition Commission fines Caxton, Independent Media for cartel conduct
  • Risk appetite lifts EM stocks, FX; South Africa enjoys moment in the sun
  • South Africa CDS hit 2-week low after Ramaphosa sworn in as president
  • Yields fall at South African inflation-linked bond auction
  • Abengoa to sell its 56 pct stake in in desalination plant in Ghana for about $26 mln
  • World Bank approves $486 mln credit to Nigerian power grid work
  • Kenyan shilling holds steady against the dollar
  • All parties need a stake in Ethiopia’s future, says opposition leader
  • African startups bet on blockchain to tackle land fraud
  • South African rand rises further after Ramaphosa sworn in as president
  • Mauritius 4-year central bank notes yield at 3.79 pct

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

#Africa #Markets | 16 Feb

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Asian shares extend bounce to 5th day, dollar sags to 3-year low
  • Shares extend recovery as volatility gauges drop
  • Fall in Vix futures suggest position unwinding over for now
  • Dollar index hits 3-year low
  • Nikkei firms as Kuroda reappointed in sign of continued stimulus
  • European sharea seen up 0.3-0.4 pct at open

Oil Markets

  • US oil hits 1-wk high as dollar sags; many Asian markets shut
  • NYMEX crude for March delivery up 0.3 pct at $61.51 a barrel (0750GMT)
  • London Brent crude up 0.4 pct at $64.58

Precious metals

  • Gold prices head for biggest weekly gain in nearly 2 years
  • Spot gold up 0.4 pct at $1,358.40 an ounce (0801GMT)
  • US gold futures up 0.4 pct to $1,360.90

Grains

  • Soybeans firm, set for biggest weekly gain in 7 months
  • Most active CBOT wheat futures up 0.4 pct at $4.63-3/4 a bushel
  • Most active corn futures up 0.1 pct at $3.68-1/4 a bushel
  • Most active soybean futures up 0.1 pct at $10.24-3/4 a bushel
  • Most active rice futures unchanged at $11.95 per hundredweight

Soft commodities (15 Feb)

  • Cocoa at 3-month high on weak dollar, speculative buying
  • May New York cocoa settled up 2.4 pct at $2,134 per tonne
  • May London cocoa settled up 1.1 pct at £1,501 per tonne
  • May raw sugar settled up 1.5 pct at 13.51 cents per lb
  • May white sugar settled up 1.1 pct at $361.10 pe tonne
  • May robusta coffee settled up 0.1 pct at $1,783 per tonne
  • May arabica coffee settled down 0.8 pct at $1.2415 per lb

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

  • South Africa’s new president Cyril Ramaphosa to deliver first State of the Nation Address (SONA) today

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

  • African startups bet on blockchain to tackle land fraud
  • South African rand rises further after Ramaphosa sworn-in as president
  • Mauritius 4-year central bank notes yield at 3.79 pct
  • Egypt military says 53 militants killed in week-long offensive
  • S&P says Nigeria’s proposed eurobond assigned ‘B’ issue rating
  • New Tunisian central bank chief promises “extraordinary measures”
  • Egypt’s central bank cuts interest rates as inflation eases
  • Nigerian economic body and state oil firm discuss gasoline price change
  • Uganda to widen relief fraud probe to UN staff, vows reforms
  • Ethiopia’s prime ministe resigns to smooth path for political reform
  • Nigerian court sets Malabu oilfield corruption case hearing for June 18
  • Investors put strong cabinet at top of South Africa’s to-do list
  • Congo defends right to explore for oil in national parks
  • Months after mudslide, Sierra Leone childrens struggle to stay in school
  • Congo says soldiers killed in border skirmish in Rwanda
  • Ramaphosa elected president of South Africa,vows anti-corruption fight
  • Ethiopia 2024 dollar bond hits 6-mth low after PM resigns
  • Nigeria launches US$2.5 bn dual-tranche bond
  • South African stocks in demand after Zuma quits, rand soars
  • South Africa’s Tutu quits as Oxfam ambassador over aid agency’s sex scandal
  • Yield on Kenya’s 91-day, 182-day and 364-day t-bills dip at auction
  • Botswana’s inflation cools to 3.1 pct in January
  • Zimbabwe’s president leads tributes to opposition leader Tsvangirai
  • Ftich rates Nigeria’s upcoming USD notes ‘B+(Exp)’
  • Nigeria tightens pricing on dual-tranche bond
  • Zambian kwacha seen gaining, Ugandan shilling losing; in week ahead
  • South Africa declares Gupta brother “fugitive from justice”
  • South Africa rating outlook not immediately affected by leadership change – S&P
  • Kenya court revokes deportation of opposition-linked lawyer
  • Zimbabwe inflation quickens to 3.52 pct y/y in January
  • Nigeria “not ruffled” by oil price drop, OPEC must focus on costs – Kachikwu
  • Kenya to appeal court ruling reversing deportation of opposition lawyer
  • South Africa oppostion EFF says will boycott election of new president Thursday
  • Moody’s says focused on policy implications from Zuma’s resignation
  • South African police arrest eight in influence-peddling probe
  • Namibia inflation slows to 3.6 pct in January

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