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African private equity and the dragon in the room
June 16, 2011--Interesting article in this morning's (16 June) FT Tilt by Sid Verma on whether Chinese investors are squeezing out private equity investors. He cites a global PE fund manager who reportedly told yesterday's
(15 June) Africa Forum 2011 conference organized by Private Equity International (www.peimedia.com): “Chinese investment in infrastructure projects in the construction phase have phased out” the development of local engineering platforms, the infrastructure-focused domestic institutional base and local managerial expertise.”
Verma looks at criticism of Chinese projects which are often criticized because they are funded with cheap Chinese loans provided the work goes to Chinese firms, and sometimes linked to resource extraction. He argues that in many cases Chinese investment is going into the early construction phase rather than operating infrastructure. Therefore where there is a completed infrastructure project that could generate revenues (port, toll road, etc.) there is often a new round where investors could get involved in the management. He writes: “It is feasible that a secondary market for such projects could develop in the coming years as Chinese investors unwind their exposures once they hit the operating stage; and/or seek to change the risk profile of an investment; and/or maximise income from operations through a capital market refinancing.
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Source: African Capital MArkets News
Bonds weaker on rand and squaring-off
June 15, 2011-- South African bonds were weaker in late trade on Wednesday, which a trader attributed to the soft rand and squaring off of positions.
Markets will be closed on Thursday for the Youth Day public holiday.
By 15:50, the benchmark R157 bond was trading at 7.590%, from its previous close of 7.500. The R207 was trading at 8.395% from 8.330% and the R186 was trading at 8.620% from 8.540%.
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Source: FIN24
RMB: Rand 15% overvalued
June 15, 2011--Rand Merchant Bank (RMB) currency strategists said on Wednesday they believe that the rand "seems 15% or so overvalued", and forecast that the unit will start to weaken more substantially in 2012.
Currency strategists John Cairns and Nema Ramkhelawan said in a note that they expect the rand's strength to last throughout this year.
"However, given our expectation of an increase in the US Federal Reserve funds rate by the middle of next year, we maintain our core forecast that the unit will start to weaken more substantially in 2012."
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Weak US data, Greece woes hit JSE read more
JSE braces for futures close-out read more
Bonds weaken a bit after US PPI data read more
Bonds weaken a bit after US PPI data read more
Marcus: Sarb has kept rand in check read more
Bonds retain weak sheen in late trade read more
Flat JSE remains nervous read more
Source: FIN24
June 15, 2011--The JSE ended lower on Wednesday as local investors looked past the futures close-out and focused on persistent concerns over Greece and over downbeat US economic data, which pulled on stocks worldwide.
After the futures close-out the domestic bourse briefly firmed, but later gave up these gains and fell thanks to disappointing economic data from the US, said Kevin Algeo, portfolio manager at Imara SP Reid. The JSE will be closed for the public holiday on Thursday.
Source: FIN24
June 14, 2011--The JSE ended slightly firmer on Tuesday, but it underperformed its US and European counterparts despite positive economic data.
Resources, including Exxaro Resources [JSE:EXX], were big market-movers today, said Andrew Todd, an equity derivatives trader at Imara SP Reid, noting that futures-related activity dominated action on the local exchange. The futures close-out occurs on Wednesday.
Source: FIN24
June 14, 2011--South African bonds were slightly weaker in late trade on Tuesday, which a Cape Town-based trader said was on the back of a higher than expected US producer price index (PPI) figure.
"We're basically a bit weaker on the US PPI figure. The US equity market is looking stronger and the bonds are up - the US 10-year is at 306 from 301 this morning. The rand hasn't done much today; it's been stuck in a range," she said.
Source: FIN24
June 14, 2011--South African bonds were slightly weaker in late trade on Tuesday, which a Cape Town-based trader said was on the back of a higher than expected US producer price index (PPI) figure.
"We're basically a bit weaker on the US PPI figure. The US equity market is looking stronger and the bonds are up - the US 10-year is at 306 from 301 this morning. The rand hasn't done much today; it's been stuck in a range," she said.
Source: FIN24
June 14, 2011--The South African Reserve Bank will continue to accumulate foreign reserves to tame the strength of the rand despite running up a financial loss over the last year, Governor Gill Marcus said on Tuesday.
"The reserve bank is not for profit. We take decisions in the interest of the country and the exchange rate is important in terms of its impact," Marcus said, adding that the bank did not target a specific level for the rand.
Source: FIN24
June 13, 2011--South African bonds remained in weak territory during late trade on Monday, largely on the back of the softer local currency. A trader noted that the market was quiet and volumes were thin.
By 15:50, the benchmark R157 bond was trading at 7.490% from its previous close of 7.470%. The R207 was bid at 8.305% and offered at 8.275% from 8.275% and the R186 was trading at 8.520% and offered at 8.505% from 8.495%.
Source: FIN24
June 13, 2011-- The JSE erased earlier losses before closing flat on Monday, with bargain-hunting and global corporate deals failing to calm investors, who remained concerned about the worsening global economic prospects.
The big sell-off in equities last week saw key indices globally, including the JSE all-share index, break through technical support levels, said Kevin Algeo, portfolio manager at Imara SP Reid. Stability has returned and investors are looking for bargains, Algeo said.
Source: FIN24
