Senegal's eurobond
Visitors on a U.N. organised trip to Senegal's Diamniadio Industrial Park, November, 2016. Photo: Reuters

Senegal’s Eurobond Shows Investors Will Reward African Countries For Political Stability

By Kurt Davis Jr., 12:01 am AFKI Original

African bond investors are laying the rules for 2017 after a tumultuous 2015 and 2016. Senegal’s $1.1 billion Eurobond launch earlier this month establishes the parameters. The offering – more than eight times oversubscribed – demonstrates investors will reward African countries for growth and political stability. But what many African sovereign bond issuers will have to consider is how big yields could become. In some corners of the continent, bankers may start to ask if there will be a penalty for those holding significant undisclosed debts.

Mining: Latest News

  • African Financial Services In 2017: Buying Low For The Upside

    African financial services By Kurt Davis Jr., 5:03 pm AFKI Original

    The story line in 2017 is buy undervalued assets, especially those with massive upside — no surprise. The surprise, however, may be looking for that opportunity in the Democratic Republic of the Congo. Kabila is still in power despite his term of office ending. Mineral prices have been low and hurt local mining companies. Budget cuts are a big topic in local politics. The DRC, like one or two other countries on this list, is worrisome on the surface. But there are opportunities in the government’s desire to strengthen private-sector investment.

  • Israeli Firm Looking To Buy Into Zambia’s Mining Investment Arm

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    Israel’s Sapir Capital had expressed interest in buying a stake worth more than $100 million in Zambia’s state mining investment arm. Zambia Consolidated Copper Mines Investment Holdings has diversified interests in mining, energy and other sectors of the southern African nation’s economy. The state-owned Industrial Development Corporation, an investment company wholly owned by the government, is the majority shareholder. Sapir, which holds a minority stake in foreign mining firms in Zambia, has more than 4,000 shareholders. Its market cap is over $657 million.

  • DR Congo To Increase Copper Production By Importing Power From South Africa

    Importing power from South Africa will boost DR Congo's copper production. By Peter Pedroncelli, 5:29 am

    The Democratic Republic of Congo hopes to import 200 megawatts of power from South Africa, which would enable Africa’s largest copper-producing nation to boost copper production in 2017 by as much as 20 percent. South African state-owned utility Eskom has made 1000 megawatts available for export over the next decade. Trust issues between mining companies and the Congolese state-owned power company threaten to derail the deal. Previous promises to deliver energy supply have failed.

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    Short-term volatility and uncertainty in the African growth story create opportunities for hedge funds. Hedge funds generally operate more flexibly than private equity, and they have the creativity to generate bond-like returns that outpace inflation. Critics say hedge funds have limited liquidity in an opaque world. The riskiest play — but with big returns — is in agriculture and land. Where land is for sale in Africa, investors are making a play for a limited resource, especially when it’s arable, ripe for production or ideal for commercial and residential construction.

  • Opinion: South Africa Has Reached Its Mugabe Moment

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  • The Anglos Are Coming To Francophone Africa With An Appetite For Investment

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  • 12 Things You Should Know About South Africa’s 2017 Budget Speech

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    The rich will pay more tax. That’s one of the most riveting things to come out of South African Finance Minister Pravin Gordhan’s 2017 budget speech. Income tax increases across the board did not materialise, but wealthy South Africans will be taxed at a higher bracket. Taxpayers earning more than $115,000 a year will pay a 45% tax rate. Around 100,000 taxpayers will be affected. Investors and global credit agencies were keen to hear Gordhan’s speech — his second one in his second stint as finance minister. Here is a closer look at 12 things you should know about the 2016 South African budget speech.

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