#Africa #Markets | 2 Jul

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Asia shares sluggish, Mexico peso up on Obrador lead
  • Mexico polls official quick count point to clear win for leftist Obrador
  • Asia shares muted, markets count down to tariff deadline
  • Euro wobbles on threat to German/EU immigration deal
  • Oil eases as Trump says Saudis ready to expand supply

Oil Markets

  • Oil falls as Saudi output rises to compensate for disruptions
  • Saudi crude output reaches near record 10.7 mln bpd – survey
  • White House says Saudis promised to boost output if needed
  • But markets remain on edge over trade spats, Iran sanctions
  • Brent crude futures down 1.1 pct at $78.35 per barrel (0231GMT)
  • US WTI crude futures down 1.2 pct at $73.26 a barrel

Precious metals

  • Gold prices inch down as dollar firms
  • Spot gold down 0.1 pct at $1,250.95 an ounce (0116GMT)
  • US gold futures down 0.1 pct at $1,252.70 an ounce

Grains

  • Wheat extends 2-day gains to more than 4 pct
  • Most active CBOT wheat futures up 0.7 pct at $5.04-1/2 per bushel (0055GMT)
  • Most active corn futures up 0.2 pct at $3.60-1/4 per bushel
  • Most active soybean futures up 0.5 pct at $8.84 per bushel
  • Most active rice futures down 0.3 pct at $11.19 per hundredweight

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

  • AU Summit continues in Mauritania

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

  • Kenya takes a look into the unknown: its underground water reserves
  • Mali car bomb attack kills 4 civilians, wounds 4 French soldiers
  • Libya’s NOC warns of impact of oil port shutdown
  • Sudan opposition leader refused entry to Egypt, says party
  • Malawian president says corruption reports “fake news”
  • Egypt says to start building nuclear plant in next 2 years
  • South African fuel prices to rise by more than 1.5 pct in July
  • DP World considering logistics facility in Ethiopia – state news agency
  • South Sudan, rebels trade attacks as truce due to start
  • Ambassadors join Ugandan march to protest violence against women
  • Egypt’s Sisi, facing online backlash, says country is on the “right track”
  • Egyptian court delays verdict in mass trial over Rabaa sit-in
  • IMF says approves further $2.02 bln of $12 bln loan to Egypt
  • Gambia’s Barrow reshuffles cabinet, appoints Darboe as vice president
  • US, UK, Norway call for end to ‘horrendous abuses’ in South Sudan
  • Ghana’s 91-day bill nearly flat at 13.33 pct
  • Struggle to control Libyan oil ports adds to global supply worries
  • Libyan coastguard says 100 migrants may have drowned near Tripoli
  • Congo says it will open 2 national parks up to oil drilling
  • Steinhoff takes $12 billion writedown after accounting scandal
  • Africa Crude – Outages prop up diffs but buyers stay on sidelines
  • Britain and Nigeria exploring ways to list naira bonds in London – Lord Mayor
  • South Africa’s rand rises but on track for weekly loss, stocks up
  • Kenya’s economic growth gathers pace in first quarter
  • Nigeria’s FX reserves fall 0.34 pct to $48 bln in June
  • Ghana reports outbreaks of H5 bird flu on farms
  • Scandal-hit Steinhoff posts $177 mln H1 operating loss
  • Kenya’s economy expands by 5.7 pct in the first quarter 2018
  • Struggle to control Libyan oil ports adds to global supply worries
  • Uganda telecom operators to start charging social media tax
  • Headquarters of West African G5 Sahel force attacked – sources
  • Angola’s Sonangol settles Cobalt Energy dispute with $350 mln payment
  • Botswana’s economy contracts 1.5 pct in Q1
  • Spain says EU pledges funds for Spain and Morocco to handle immigration
  • eSwatini police fire stun grenades at anti-govt protesters
  • As sanctions bit, Iranian executives bought African passports
  • Egypt’s Carbon Holdings to sign $10.9 bln petrochemicals contract – settlement
  • Ethiopia says grenade attack part of plot to disrupt economy; involving power, telecoms outage
  • South Africa’s trade surplus widens to 3.52 bln rand in May
  • Uganda shilling holds steady against the dollar
  • Kenya’s inflation rises to 4.28 pct in June
  • Kenyan shilling holds steady against end month demand
  • Steinhoff gets debt standstill approval, finalises terms for restructuring plan
  • Madagascar to hold presidential elections in November
  • Leaders of Ethiopia and Eritrea to meet soon in bid for peace – media
  • Zimbabwe’s Mnangagwa says grenade caused blast at rally last week
  • South Africa’s credit demand growth slows to 4.6 pct in May

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

#Africa #Markets | 7 Mar [Brief]

By Rafiq Raji, PhD

Key #Africa #events or #data releases today [Posts & comments at my Twitter handle @DrRafiqRaji as they happen]

#US Secretary of State Rex #Tillerson starts 5-nation #Africa trip [#Security-focused; hence the choice of #Chad, #Djibouti, #Kenya, #Nigeria and #Ethiopia]

#Nigeria’s @MBuhari to belatedly tour hotspots today

#SierraLeone presidential and parliamentary elections today [#SaloneDecides]

#SouthAfrica’s #Ramaphosa to continue departmental visits kicked off yesterday

#Africa #Markets | 20 Nov

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Key data releases or events to follow today (& those over the weekend):

* NIGERIA – Q3 GDP due by 0730GMT. [Forecast is 0.8% yy from 0.6% in Q2] #Nigeria #GDP

* KENYA – Supreme Court to rule on 2nd presidential election petition today. #Kenya #ElectionsKE #PPII

* ZIMBABWE – President Mugabe refused to quit over the weekend. [Impeachment expected on 21 Nov] #Zimbabwe #MugabeMustGo

* NIGERIA – Elections in Anambra state in agitated southeast of country were  largely successful. #Nigeria #AnambraDecides

#Africa #Markets | 3 Nov

(REUTERS) The following company announcements, scheduled
economic indicators, debt and currency market moves and
political events may affect African markets on Friday.

GLOBAL MARKETS
Asian shares took a breather on Friday as investors gave a
guarded reception to Republican plans for massive U.S. tax
cuts, while welcoming the appointment of a centrist at the
helm of the Federal Reserve.

WORLD OIL PRICES
Oil markets rose on Friday, supported by OPEC-led supply
cuts which are tightening the market as well as by strong
demand, but analysts cautioned that the cuts would need to
be extended to counter rising U.S. output.

SOUTH AFRICA MARKETS
South Africa’s rand extended its comeback on Thursday,
ignoring turbulence in parliament to trade below the
psychological 14.00 mark as a sharp slide in the greenback
encouraged some short buying before focus shifts to Friday’s
U.S jobs data.

NIGERIA CURRENCY
Nigeria’s government expects the naira currency to
strengthen and does not see a significant risk of
devaluation in the medium term, Finance Minister Kemi
Adeosun said on Thursday.

NIGERIA OIL
Nigeria must use its oil wealth to prepare for a future when
the world no longer runs on fossil fuels, the vice president
said on Thursday.

NIGERIA BUDGET
Nigeria’s President Muhammadu Buhari will present the 2018
budget to parliament on Nov 7, he said in a letter on
Thursday, seeking to avoid the delays that have plagued
previous budgets, not passed until well into the years they
targeted.

KENYA MARKETS
The Kenyan shilling was steady against dollar on
Thursday supported by tight market liquidity and inflows
from horticultural sector matching dollar demand from
multinational companies, traders said.

KENYA STRIKE
Nurses in Kenya have ended a five-month-old strike over
delays to agreed wage rises, a union official said on
Thursday, just as university lecturers began a similar
action over their pay and benefits.

KENYA SECURITY
Kenya’s chief justice said the national police chief had
“enhanced” the security of Supreme Court judges after one of
their bodyguards was shot, denying a Reuters report that a
request for extra security had been turned down.

KENYA STOCKS
Kenya’s main stock exchange index, already up 18.5 percent
this year, looks set to be recharged as it recovers from
months of political uncertainty, its chief executive officer
said on Thursday.

KENYA EQUITY GROUP
At least half a million small borrowers at Kenya’s biggest
lender by customers, Equity, have been locked out
of credit by an interest rate cap imposed a year ago, the
bank’s chief executive said on Thursday.

TANZANIA MINING
Acacia Mining’s top two executives have resigned in
the midst of talks between its parent company and the
Tanzanian government aimed at ending a long-running dispute
that has hit Acacia’s operations.

GHANA BOND
Ghana plans to issue a three-year domestic dollar bond next
week to develop local funding sources to support the
economy, deal arrangers told Reuters on
Thursday.

IVORY COAST ELECTRICITY
Ivory Coast started producing power on Thursday at a 275
megawatt (MW) hydroelectric plant that will boost the
country’s electricity output by more than 10
percent.

UGANDA MARKETS
The Ugandan shilling was broadly stable on Thursday,
underpinned by waning demand for dollars from importers and
commercial banks.

ANGOLA RATES
Angola’s central bank kept its benchmark lending rate
unchanged at 16 percent following a policy meeting on Nov. 1
as consumer price inflation slows, the regulator said in a
statement.

NAMIBIA RESERVES
Namibia’s foreign reserves rose in September to 31.4 billion
Namibian dollars ($2.25 billion) from N$30.6 billion at the
end of August, central bank data showed on
Thursday.

NAMIBIA ECONOMY
Namibia’s economy will grow at 1.6 percent this year and by
double that in 2018 as the mining sector emerges from years
of contraction and the impact of recent severe drought
eases, the finance minister said on Thursday.

CONGO ECONOMY
Democratic Republic of Congo’s central bank said on Thursday
that it expects year-end inflation to stand at 49.8 percent,
down from an earlier estimate of over 52
percent.

macroafricaintel | On the African prospects of Islamic finance

By Rafiq Raji, PhD

I attended an Islamic finance roundtable event in Lagos recently. It was organised by S&P Global Ratings, one of the three leading global credit rating agencies. There is increasing interest in Islamic finance in African countries, whether in the form of a sukuk (Islamic bond which makes returns from an underlying revenue-generating asset as opposed to scheduled and fixed interest payments in conventional bonds) or commercial banking products that avoid the payment of interest, which Muslims are barred from earning. African sukuk issuances have yet to impress, though; about US$2 billion (since 2014 mostly), according to S&P Global Ratings. (17 African sovereigns issued US$46 billion in conventional debt in 2015.) Over the past two years, annual global sukuk issuance was about US$65 billion on average and end-2016 Islamic finance industry assets are estimated at about US$2.1 trillion. There has been a decline in the volume of global issuances lately, though; low crude oil prices are one reason why. Even so, there are significant prospects for more sukuk issuances by African sovereigns and sub-sovereigns. A sign that Islamic finance may eventually become mainstream is that corporate entities are beginning to seriously consider it as a source of financing. The Lagos-based Africa Finance Corporation (AFC) issued a 3-year US$150 million sukuk in early 2017, for instance.

Entrenched ways
Curiously, Muslims have not warmed up to Islamic banking as was probably envisaged, though. Most have gotten used to conventional banking, especially as they have over time devised personalized mechanisms for abiding by their religious principles while still availing themselves of conventional commercial banking services: For example, when paid interest on their savings account deposits, they would either ask that the interest portion be removed or alternatively, they maintain it as a permanent balance in their accounts. The motivation is rational. To forgo conventional banks for the few Islamic ones that have only recently begun to spring up in a few African countries could be costly. Conventional commercial banks have more heft to provide a more diversified bouquet of banking services than the still budding Islamic ones. To become more commonplace, Islamic banking professionals have to find ways to make their services appealing to non-Muslims. Patronage of an Islamic bank does not require that you believe in Islam. It is simply a type of banking that insists that if you must earn a return, it should be from actual assets and not just financial transactions. Call it ethical banking, if that is more palatable to your religious sensibilities. Such sentiments seem to have been overcome in the Islamic capital market sector, however. Non-Islamic entities and countries have issued sukuk, for instance. Still, Islamic law does underpin the industry.

Standardize now
A lack of standardization is becoming a problem, though. To be clear, Islam is clear on what the rules are or should be. Varied and unusually dynamic interpretations of sharia (Islamic law) on what is compliant or not have been problematic, however. The controversial case of Dana Gas, an Abu Dhabi-listed gas company, may be the crisis the industry needs to finally put things in order. To avoid parting with more cash than it agreed to, Dana Gas is seeking to restructure two sukuk issues worth US$700 million into more supposedly Islamic-compliant ones. The reason is obviously not religious but financial. It is the classic case of trying to use religion to escape fulfilling an obligation. Still, Dana Gas is simply latching on to what seems like a “dynamic” Sharia interpretation culture in Islamic finance. To be fair, prominent Islamic finance sharia advisors have been forceful about what a dangerous precedent the Dana Gas case would set if it wins the case it filed with an English court, which may not be heard before December 2017 (according to The Economist, a British newspaper), two months after the sukuk issues would have matured. Put simply, the problem is human, not religious. It is a classic case of an attempt to breach a contract after agreeing to its terms. Bear in mind the sukuk issues in question were issued some 10 years ago. That is a long time for anyone or entity to suddenly develop a phony sense of religiosity. There could not be a greater need for standardization. A global authority on Islamic finance needs to be instituted without delay, a point made at the S&P Global Ratings Lagos event (and in recent features by The Economist and African Banker magazine). The Malaysian model, which is more liberal and advanced than the Middle Eastern variants, is touted as befitting. The current artificial ambiguity is a needless constraint.

Also published in my BusinessDay Nigeria newspaper column (Tuesdays). See link viz. http://www.businessdayonline.com/african-prospects-islamic-finance/

macroafricaintel Weekly | 17 Jul

By Rafiq Raji, PhD

Click to download PDF version

Date Data / Event Period Forecast Previous
17 Jul Nigeria CPI, % yy (mm) Jun 2017 15.9 (1.4) 16.3 (1.9)
17 Jul Kenya Policy Rate, % 10.0 10.0
19 Jul South Africa CPI, % yy (mm) Jun 2017 5.2 (0.3) 5.4 (0.3)
19 Jul South Africa Retail Sales, % yy May 2017 0.6 1.5
20 Jul South Africa Policy Rate, % 7.0 7.0