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The country offers huge potential and possible pitfalls for investors
A piece of very rare African senior bank issuance could also come this week
African issuers are dominating CEEMEA issuance
The company's curve has massively outperformed the South African sovereign this month
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The Republic of South Africa had a difficult end to 2015. Fitch cut the country’s credit rating one level on December 4 to BBB-, the lowest notch in investment grade, and in line with the assessment of S&P, which lowered its outlook to negative from stable on the same day. Just days later, President Jacob Zuma abruptly replaced his finance minister, Nhlanhla Nene, with David Van Rooyen and then a few days later — after strong local and international criticism — reappointed Pravin Gordhan. who had held the job between May 2009 and May 2014. The country’s growth has disappointed over the last year and is expected to continue to do so, as power shortages and job strikes take their toll. Meanwhile, the government’s decision not to tighten fiscal policy in the face of weakening revenue and rising debt levels has been heavily criticised, with Fitch naming it as one of factors behind the downgrade. At GlobalCapital’s roundtable, held in Cape Town on November 26, South Africa’s National Treasury, sub-sovereign issuers and leading bankers discussed how best to access the capital markets at this difficult point in time, and their outlook for the South African economy. -
The world’s economy is yet to recover fully from the global financial crisis of 2008. Global recovery is uneven,
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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.
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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.
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Most African sovereign bonds yield have spiked to double digits in the last week as the sell off in US high yield bonds and associated funds has hit the emerging markets.
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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.
