AfricaMe-Team, Auteur à Africa M.E.

Nigerian naira hits all-time low of 334.50 per dollar

27 July 2016 Comments (0) Africa, Business, Latest Updates from Reuters Like

ABUJA (Reuters) – Nigeria naira weakened to an all-time low of 334.50 against the dollar on the interbank market on Wednesday, a day after the central bank hiked interest rates to try to lure foreign investors back into local assets, traders said.

The naira fell 5.8 percent on Wednesday from its opening rate, and $10 million was traded at the new record low.

Traders said investors were pushing the currency lower to test the limit of how far it can fall, given a spread of almost 12 percent between the official and black market naira rates.

“If we have more people trying to buy the naira then it should strengthen. I think we will keep seeing the trickles … I don’t think we will see large inflows until the fundamentals of the economy improves,” one trader said.

(Reporting by Chijioke Ohuocha; editing by John Stonestreet)

Egypt says close to securing 3-year IMF loan programme

27 July 2016 Comments (0) Business, Latest Updates from Reuters, Middle East Like

CAIRO (Reuters) – Egypt said on Tuesday it was close to agreeing an International Monetary Fund (IMF) lending programme to ease its funding gap and restore market stability and was seeking to secure $7 billion annually over three years.

Prime Minister Sherif Ismail ordered the central bank governor and minister of finance to complete negotiations for the programme with an IMF team that will visit Egypt in the next few days, the cabinet said in a statement.

“We are resorting to the IMF because the budget deficit is very high, between 11 and 13 percent within the past six years,” finance minister Amr el-Garhy, said in a phone interview with presenter Lamis El-Hadeedi on a private TV channel late on Tuesday.

In Washington, the IMF welcomed Egypt’s request for financial support and said it would send a mission to Egypt for about two weeks from July 30.

The cabinet statement, after a five-hour meeting, was the first official confirmation that talks with the IMF were under way. The statement said talks had been ongoing for three months.

“The prime minister stressed the need to cooperate with the IMF through the support program to enhance international confidence in the economy and attract foreign investment, and therefore achieve monetary and financial stability … targeting $7 billion annually to fund the program over three years,” the cabinet statement said.

The government is seeking $12 billion from the IMF, $4 billion a year, which will carry an interest rate of 1 or 1.5 percent, el-Garhy said. The package includes issuing $2-3 billion in international bonds which will be offered as soon as possible, between September and October, he added.

Economists welcomed the news, which came after a turbulent few weeks for Egypt’s currency, the pound, which has plummeted to new lows on the black market as confusion mounted over the direction of monetary policy.

“It’s great. Finally,” said Hany Genena, head of research at Beltone Securities Brokerage. “Confidence will be restored in the government and central bank. Secondly, we will see flotation of the pound, if not tomorrow, next week, the week after.”

Genena said he expected the Cairo stock market to surge after the news and for the currency to strengthen on the black market. The black market had already strengthened slightly from lows near 13 to the dollar on Monday.

Two black market traders contacted by Reuters said they were selling dollars at about 12.80 to 12.85 pounds after the IMF deal was announced.

“I think the stock index will hit 8,000 in the next couple of days,” Genena added. The benchmark EGX30 <.EGX30> closed up 0.3 percent at 7,540 on Tuesday.

Egypt’s economy has been struggling since a mass uprising in 2011 ushered in political instability that drove away tourists and foreign investors, both major earners of foreign currency. Reserves have halved to about $17.5 billion since then.

The dollar shortage has forced Egypt to introduce capital controls that have hit trade and growth, while the value of the Egyptian pound has plummeted on the black market in recent weeks as expectations of a second devaluation this year mount.

The government has pushed ahead with its reform programme, including plans for a value added tax (VAT) and subsidy cuts that were put on hold when global oil prices dropped.

A VAT bill is in its final stages of preparation but has faced resistance in parliament due to concerns over inflation, which has touched seven-year highs since the currency was devalued by 13 percent in March.

Egypt’s ambitious home-grown fiscal reform programme formed the basis of a $3 billion three-year loan deal with the World Bank that was signed in December. But the cash has yet to be disbursed since the World Bank is waiting for parliament to ratify economic reforms including VAT.

A cabinet minister told Reuters last month that Egypt had started negotiations with the IMF and that the central bank was leading the talks.

A statement released by Capital Economics, an independent economic research company, also welcomed the news.

“If approved, this would help to plug Egypt’s external financing requirement and improve the economy’s growth prospects,” it said. “This would make a sizeable dent in Egypt’s gross external financing requirement, which we estimate to be around $25 billion over the coming year.”

(Reporting by Amina Ismail and Lin Noueihed; Additional reporting by David Lawder in Washington; Writing by Lin Noueihed; Editing by Tom Heneghan and James Dalgleish)

Nigeria’s central bank raises benchmark rate to 14%

26 July 2016 Comments (0) Africa, Business, Latest Updates from Reuters Like

LAGOS (Reuters) – Nigeria’s central bank raised its benchmark interest rate by a surprise 200 basis points to 14 percent on Tuesday and maintained its existing cash reserve ratios for commercial banks in a bid to stabilise the naira.

In a Reuters poll, the median forecast of 13 analysts taken July 18-21 predicted that Nigeria would raise interest rates by 100 basis points to 13 percent.

(Reporting by Ulf Laessing and Alexis Akwagyiram; Editing by Ed Cropley)

Kenya’s central bank chief says inflation under control

26 July 2016 Comments (0) Africa, Business, Latest Updates from Reuters Like

NAIROBI (Reuters) – Inflation in Kenya is under control despite a food price-driven rise in June and pressure from recent increases in the fuel tax, the governor of the central bank said on Tuesday, a day after the bank left interest rates unchanged.

The year-on-year rate of inflation rose to 5.80 percent in June from 5 percent in May, as prices of food items went up. The retail prices of fuel went up on July 15, ushering in more pressure on the rate.

“The MPC (Monetary Policy Committee)was quite comfortable with the dynamics,” Governor Patrick Njoroge told a news conference.

Policymakers left the benchmark lending rate unchanged at 10.50 percent on Monday saying the pressure on inflation was temporary.

Njoroge said there was ample liquidity in the banking sector, adding that it was also starting to be distributed more evenly among the country’s 42 lenders.

The governor, who has in the past said liquidity in the sector was concentrated among a handful of large lenders, said on Tuesday mid-sized banks were getting more liquidity as their larger counterparts saw a reduction in recent months.

Two mid-sized banks and a smaller lender were shut down in the nine months to April this year, raising concerns about the health of the banking sector.

He said Britain’s vote to leave the EU last month could have implications for the Kenyan economy in the medium term as foreign investors take a wait-and-see attitude.

Britain is an important source of investments for the East African nation, whose exporters are also fretting about the impact of Brexit on a trade deal between the East African Community and the EU that is supposed to be signed by October.

Tanzania has said it may not sign the deal, deepening the anxiety among Kenyan officials and exporters.

(Reporting by Duncan Miriri)

Kumba appoints new CEO, H1 earnings rise 20%

26 July 2016 Comments (0) Africa, Business, Latest Updates from Reuters Like

JOHANNESBURG (Reuters) – Kumba Iron Ore said on Tuesday that Themba Mkhwanazi would take the helm as chief executive from Sept 1, replacing Norman Mbazima, who is stepping down to focus on his role as deputy chairman of Anglo American South Africa.

* Mkhwanazi, a former Rio Tinto manager, has been chief executive officer of Anglo American’s Coal South Africa business since May 2014.

* Kumba’s first-half results came in as expected, with the Anglo American unit posting a 20 percent rise in headline earnings per share to 9.41 rand.

* Kumba had flagged to the market that it expected first-half profit to increase between 14 and 23 percent because of a deferred tax asset in the comparative period.

(Reporting by Ed Stoddard; Editing by Joe Brock)

Mauritius exporters see Brexit crimping textile export earnings to UK by 10%

25 July 2016 Comments (0) Africa, Business, Latest Updates from Reuters Like

PORT LOUIS (Reuters) – Revenues generated by Mauritius from textile exports to Britain will decline by about 10 percent this year as a result of the British vote to leave the European Union, the country’s export association said on Monday.

The EU is Mauritius’ largest trading partner. The Indian Ocean island nation earns an annual average of 25.55 billion rupees ($722.77 million) from goods shipments to the bloc.

Britain remains the largest buyer of Mauritian goods within the EU, accounting for 18 percent of total exports to the bloc. Textiles are Mauritius’ top export to the UK, followed by seafood and sugar.

“Quantity wise, there will be a drop of 10 percent in our exports to the UK as a consequence of the fall in consumerism level in UK coupled with the depreciation of the pound,” the export group said in a report.

The Mauritius Exports Association (MEXA) report said 90 percent of all revenues from exports of textile and apparels to the UK comes in pounds while imports are in U.S. dollars.

MEXA said exporters’ profitability is expected to be “squeezed both in terms of exports and imports; exports revenue being depleted with the depreciation of the pound…and costs being inflated with the appreciation of the U.S. dollar.

“Companies are thereby faced with a double whammy.”

In 2015, textile and apparel exports to Britain amounted to 6.57 billion rupees, according to MEXA data.

($1 = 35.3500 Mauritius rupees)

(Reporting by Jean Paul Arouff; editing by Elias Biryabarema and Mark Heinrich)

South Africa’s Standard Bank awarded banking license in Ivory Coast

25 July 2016 Comments (0) Africa, Business, Latest Updates from Reuters Like

JOHANNESBURG (Reuters) – South Africa’s Standard Bank has been awarded a banking license in Ivory Coast, one of Africa’s fastest growing economies, extending its reach to 20 countries on the continent, the lender said on Monday.

“Standard Bank – trading as Stanbic Bank – has been formally awarded a banking license in Côte d’Ivoire,” it said in a statement, adding that it was gearing up to commence banking operations but did not give a timeframe.

(Reporting by TJ Strydom; Editing by James Macharia)

Caixabank bid for Banco BPI hits new snag as vote on rights cap delayed

22 July 2016 Comments (0) Africa, Business, Latest Updates from Reuters Like

PORTO, Portugal (Reuters) – A meeting of shareholders in Portugal’s Banco BPI, that started on Friday and was expected to lift a 20 percent limit on voting rights, was suspended until September due to a legal injunction, in a new snag for a takeover bid by Spain’s Caixabank.

The bid is opposed by the bank’s No. 2 shareholder, Angolan investor Isabel dos Santos, the daughter of Angola’s president. Caixabank has said its bid hinges on the scrapping of the voting rights limit, which has so far allowed dos Santos to fend off its attempts to control the country’s third-largest lender.

Chairman of the BPI board Artur Santos Silva said the injunction blocked the vote due to a minor procedural issue, which Santos Silva expected to be resolved by Tuesday.

He said Caixabank had then proposed to postpone the meeting for 45 days, which shareholders approved. Portugal’s market regulator CMVM had suspended trading in BPI shares on Friday awaiting the result of the vote.

“I am very sorry about this situation … which is hard to understand,” he said, adding the injunction was based on the fact that the minutes of the board meeting that set Friday’s vote had lacked a formal seal of approval. “On Tuesday this problem will disappear,” he said.

He did not name the shareholder who launched the injunction, but shareholders at the meeting said Portuguese shareholder Violas Ferreira, who has a 2.7 percent stake in BPI, had presented it.

Thanks to a government decree in April aimed at putting an end to voting right limits in the banking sector, Caixabank would have voted with its full 45 percent stake in BPI to lift the cap. The motion requires a two-thirds majority to pass.

In April, Caixabank launched a takeover bid for the lender, offering 1.113 euros per share, less than its initial offer of 1.329 euros, which dos Santos fended off last year.

Dos Santos has already said the price is too low and wants an independent auditor to fix a minimum price for BPI shares, above the current offer. She has also accused the government of making an “unprecedented and clearly partial” decision in changing the law on rights limits.

But BPI’s board has called the new offer “opportune and friendly”, if low. It said an eventual takeover should help resolve the problem of BPI’s excessive exposure to risky Angolan assets and better prepare the lender to meet growing capital requirements from regulators.

BPI, which draws most of its profit from Angola, has been affected by a change in European rules that classify all exposure to the African country as risky and to be fully provisioned for, significantly reducing BPI’s solvency ratios. It has to cut the exposure and comply soon or pay hefty fines.

(Reporting By Sergio Goncalves, writing by Andrei Khalip, editing by Axel Bugge and Susan Thomas)

Morocco annual inflation rises to 2.3% in June

22 July 2016 Comments (0) Business, Latest Updates from Reuters, Middle East Like

RABAT (Reuters) – Morocco’s annual consumer price inflation rose to 2.3 percent in June from 1.9 percent in May, due to higher food prices, the High Planning Authority said on Friday.

Annual food inflation jumped to 4.4 percent from 3.6 percent in the previous month as June coincided with the holy fasting month of Ramadan. Non-food price inflation rose slightly to 0.6 percent in the 12 months to June from an annual 0.5 percent in May.

Transport costs fell 0.6 percent, but hotels and restaurants were 2.4 percent more expensive, the agency said without giving details.

On a month-on-month basis, the consumer price index eased to 0.4 percent in June, down from 0.5 percent in May as food price inflation was steady at 0.8 percent.

(Reporting By Aziz El Yaakoubi; Editing by Catherine Evans)

Mauritius’ trade deficit widens 22.1% in May

22 July 2016 Comments (0) Africa, Business, Latest Updates from Reuters Like

PORT LOUIS (Reuters) – Mauritius said on Friday its trade deficit widened 22.1 percent to 6.91 billion rupees ($195.47 million) in May from the same period a year earlier, hit by a dip in exports of machinery and transport equipment.

The Indian Ocean island nation’s earnings from exports fell 6.5 percent from a year before to 7.46 billion rupees in May, the government’s statistics office said in a statement. The United States was the main destination for Mauritius’s exports, followed by France and Britain.

Foreign sales of machinery and transport equipment declined to 687 million rupees in May from 1.19 billion rupees in the same period last year.

Total imports rose 5.4 percent from a year before to 14.37 billion rupees in May. Some 20.3 percent of imports in the period came from China.

($1 = 35.3500 Mauritius rupees)

(Reporting by Jean Paul Arouff; Editing by Elias Biryabarema and Catherine Evans)

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