Africa

With foreign direct investment (FDI) commonly touching $20bn, a renewed focus on education and long overdue investment in the power sector, South Africa is clearly worth investing in. But there are plenty of challenges, not least the moribund domestic economy, electricity shortages, rising US rates, drought and a China slowdown. As a result, there will continue to be short term pain, but the outlook for the long term is brightening. Chris Wright reports.

Kenya’s two year sovereign loan grew from $600 to $750m in syndication, boosted by the lack of syndicated loans elsewhere in Africa this year.

Egypt’s Banque du Caire has cancelled plans to raise a loan for as much as $250m, but may consider signing a loan in 2016 instead.

Standard Chartered and Lonmin both begin new chapters in their stories today, with fresh capital from rights issues. In both cases the underwriting banks had to work for their fees, as the stories required explaining and each deal ended in a rump placement today.

Ethos Private Equity sold in a block trade on Tuesday night its last shares in Transaction Capital, the Johannesburg-listed commercial finance company.

Standard Chartered and Lonmin will each begin a new chapter in their stories on Friday, as results are published of their rights issues, books for which closed on Thursday.

Anglo American’s announcement this week that it will increase its asset sales target to $4bn, as part of a plan to adjust to painfully lower minerals prices, is the latest sign of two trends that are expected to drive M&A activity and equity capital markets business in 2016: carve-outs and divestments of assets; and the shake-up in natural resources.

South Africa is having rating trouble, and it looks serious. Since Friday, it is teetering on the edge of investment grade at both Standard & Poor’s and Fitch, a big problem for a country with a lot of infrastructure to build. But South Africa’s woes don't go too deep, and the country's growth could bounce back quickly.

The Egyptian loan market is showing signs of recovery with deals from Banque Misr and National Bank of Egypt in recent months. Bankers say there is more to come in 2016.

Ghana National Cocoa Board (Cocobod) is in the market for a three year club loan, after signing its annual $1.8bn one year loan refinancing in September.

Egypt’s Banque Misr signed its $250m three year loan on Sunday with five lead banks.

Zesco, the Zambian state-owned power firm, is syndicating a $122m seven year loan, part of which is guaranteed by US government agency USAID.