Tag Archives: liquidity
liquidity: Latest News
Kurt Davis Jr., 10:55 am AFKI Original
Many African economies could use an infusion of cash into their agricultural markets at the exchange entry point. Liquidity is vital to further stimulate market activity in Africa, especially in the agriculture sector, where 70 percent of Africans make a living. Many African countries do not have agricultural commodity exchanges (or any active trading market) and effectively lack the liquidity and incentive to spur more cash inflow and investors into the sector.
Kurt Davis Jr., 2:00 am AFKI Original
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.
Dana Sanchez, 4:06 am
Some unregistered remittance firms have been detrimental to the Nigerian economy, the government says. They are accused of withholding dollars and paying local beneficiaries with naira. Just three remittance firms — all based in the U.S. — are allowed to continue operating in Nigeria. Nigeria receives more than $20 billion in remittances a year. The move by the central bank is arbitrary, inexplicable and detrimental to the Nigerian diaspora, said the CEO of a suspended firm.
Staff, 12:02 am
In 2015, remittances from the Zimbabwean diaspora were US$935 million — more than the country gets through foreign direct investment. Diaspora remittances could reach US$1.5 billion by the end of 2016. The government is exploring issuing diaspora bonds to entice the diaspora community to inject more money into the economy. About 2 million Zimbabweans live abroad, mostly in South Africa and U.K.
Staff, 7:56 am
The Central Bank of Nigeria said that it would move to a purely market-driven currency system to help Africa’s biggest economy cope with the effects of the global oil price slump in the past couple of years. In the short term, the move is expected to be painful. Long term however, the naira floating freely will likely be a net positive to the country’s economy. Devaluing the naira is a step towards helping to fix Nigeria’s stalling economy, but it won’t solve all its problems.
Dana Sanchez, 3:02 pm
Some small and medium-sized Indian pharmaceutical companies must wait six-to-eight months to get paid as currency liquidity issues plague African oil-exporting countries. China worked out an agreement in April with Nigeria to use the yuan as the trading currency. In 2012-2013, in the wake of U.S. and U.K. sanctions, India worked out a barter deal with Iran using the rupee as trading currency. “We can work out something similar with countries like Nigeria … Importers now no longer need to buy the U.S. dollar,” an Indian stakeholder said.
Staff, 12:01 am
South Africa hopes to revitalize its diamond industry by encouraging companies to process or add value to minerals for export – known locally as beneficiation. Global diamond demand has declined due to slower interest from China. Mining companies have slashed output and South Africa is losing ground to Botswana.
Staff, 12:20 am
A decade ago, Mugabe told a packed rally at the Chinese-built national sports stadium in Harare, “We have turned east, where the sun rises, and given our back to the west, where the sun sets.” This century may well be Asia’s, but the sun is not setting in the west as quickly as Mugabe predicted. Today, it is far from being a zero-sum choice between the East or West. Diversification of partnerships is the favored strategy of many African governments.
Staff, 4:00 am
Gulf banks don’t face the regulatory and capital constraints that European banks do, so they are able to provide liquidity to African banks, said Stanbic Bank Uganda CEO. Many have spare funds. Deposits have continued to grow despite oil export revenues plunging. Most Gulf banks have built up comfortable capital cushions. This contrasts with many Western banks, which face cost-cutting and regulatory pressures to improve capital adequacy in their home markets.
Kevin Mwanza, 8:02 am
The lack of liquidity on most African stock exchanges has limited the value and number of listings on the continent and prompted many businesses to opt for a London listing instead. In the past five years no foreign company has listed on an African exchange, but in that time 12 African companies have completed stock market launches on non-African exchanges, seven of them in London.
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