Market Commentary
Oil prices experienced a decline on Wednesday due to trader caution in anticipation of potentially unfavourable manufacturing data and the annual Jackson Hole meeting. This event will host influential central bankers, including representatives from the United States, discussing matters of interest rates. At 0738 GMT, Brent crude saw a decrease of 51 cents, settling at $83.52 per barrel. Concurrently, U.S. West Texas Intermediate crude dropped by 49 cents to reach $79.15 per barrel.
KENYA: Treasury Seeks 21 Billion Shillings in Tap Sale to Recover Undersubscribed Bond
The Treasury has initiated a tap sale for 21 billion shillings from its August bond issuance after the Central Bank of Kenya (CBK) rejected bids with high-interest demands in the initial sale. The dual-tranche bond, combining a two-year and a reopened five-year paper, attracted bids totaling 53 billion shillings in the first sale but only 19.1 billion shillings were taken up by the CBK due to elevated interest demands. The tap sale, which began on Tuesday and continues until August 24, aims to retrieve some of the remaining 33 billion shillings at rates lower than initially demanded. The Treasury had lowered its domestic borrowing target to 316 billion shillings for the fiscal year, resulting in a preference for cost-effective bids.
NIGERIA: Nigeria’s Stock Exchange Plans Dollar-Denominated Securities to Alleviate Currency Woes
The Nigerian Exchange Ltd. intends to enable companies in special economic free trade zones and those with foreign earnings to list bonds in dollars, with potential plans to extend this to equities. This initiative aims to address the challenge of accessing hard currency in Africa’s largest economy. CEO Temi Popoola emphasized the goal of offering dollar-denominated bonds and equity, potentially mitigating foreign currency fluctuations. Despite a recent foreign exchange market overhaul, oil companies in Nigeria still struggle to secure the necessary dollars. The Exchange’s proactive measures align with President Tinubu’s economic reforms and foster domestic investment.
GHANA: Government Extends Domestic Dollar Bonds and Pension Funds Offer Deadline
The government has extended the domestic dollar bonds and pension funds alternative offer program until August 25, 2023. The Finance Ministry clarified that this administrative extension benefits holders yet to submit their tenders, granting them extra time to attain internal approvals for participation. Initiated in July 2023, the alternative offer allowed qualified holders to exchange their domestic notes and bonds for a new bond package. The extension offers an administrative window for more participation in the exchange, supporting the government’s financial strategy.
ZAMBIA: Government Plans to Repeal Mining Act to Enhance Regulation and Resource Exploration
The Government is set to repeal the Mines and Minerals Development Act No. 11 of 2015 to establish the Minerals Regulation Commission and create a comprehensive legal framework for geological mapping and mineral resource exploration. Cabinet’s preliminary approval paves the way for introducing a Bill in Parliament for the repeal. Acting Chief Government spokesperson Mike Mposha noted that the current legislation falls short in addressing issues such as rising illegal mining, environmental degradation, subpar occupational health and safety standards. The proposed Bill aims to foster effective regulation, stimulate investment in mineral exploration, and boost government participation in mineral resource development, aligning the mining industry with contemporary demands.