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IMF Working Paper-The Relationship between the Foreign Exchange Regime and Macroeconomic Performance in Eastern Africa
June 7, 2012--Summary: This study examines the relationship between the foreign exchange regime and macroeconomic performance in Eastern Africa. The study focuses on seven countries, five of which decisively liberalized their foreign exchange regimes.
The study assesses the relationship between (i) growth and various determinants, including the exchange regime, the real exchange rate, and current account liberalization; and (ii) inflation and various determinants, including lagged inflation, the nominal exchange rate, the exchange regime, and liberalization. We find that in our sample, for the determinants of growth, investment and the real exchange rate are significant determinants but not the exchange regime or liberalization; and for inflation, the lagged inflation rate, nominal exchange rate, and the de facto regime are significant. Exchange rate pass-through is limited.
SA gold stocks gain, gold miners buck trend
June 7, 2012--South African stocks ended firmer on Thursday as investors took solace in improved global sentiment but gold shares refused to be consoled, choosing instead to follow spot prices lower.
The JSE Top 40 - (Tradeable) [JSE:J200] blue-chip index closed up 0.91% at 29 947.48 and the broader All Share [JSE:J203] index gained 0.90% to 33 904.86.
Africa's largest gold producer AngloGold Ashanti was knocked 5% to R303.50 while Gold Fields fell 5.5% to R110.57.
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Source: FIN24
Bonds firm as rand strengthens
June 7, 2012--South African bonds firmed in afternoon trade on Thursday after the rand strengthened to the R8.20 per dollar level.
"Bond trading this afternoon has been driven by the stronger rand‚" a local trader said.
At 16:01‚ the benchmark R157 bond was trading at 6.230% from Wednesday’s close of 6.260%‚ Tuesday’s close of 6.330% and Monday’s close of 6.355%. The R207 was trading at 7.505% from a previous close of 7.540% and the R186 was trading at 8.240% from its close of 8.280%.
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Source: FIN24
Stockbrokers Insist on Creation of Stabilisation Fund
June 6, 2012--The Chartered Institute of Stockbrokers (CIS) is still pushing for the establishment of a stabilisation fund for the nation capital market as a way out of the downturn that has lasted over four years.
A senior council member of the CIS disclosed this in an interview with THISDAY last Monday, saying the forbearance being planned by the Federal Government would not solve the liquidity problem in the market.
The Coordinating Minister of the Economy and Finance Minister, Dr. Ngozi Okonjo-Iweala, had last week reiterated the Federal Government plan to work out a forbearance package for stockbrokers as part of measures to stimulate confidence in the Nigerian stock market and increase liquidity. Okonjo-Iweala gave the assurance at the annual meetings of the African Development Bank (AfDB) in Arusha, Tanzania.
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Source: This Day Live
JSE in positive territory
June 6, 2012-- The JSE is firmer in midday trade on the back of much better than expected Australian gross domestic product (GDP) figures released earlier today, and also on expectation that the European Central Bank (ECB) might lower its interest rates later in the day.
At 11:39 local time‚ the JSE All Share [JSE:J203] index was up 0.62% to 33‚323.06 points‚ with resources gaining 1.3%, gold counters dipping 0.10% and platinum stocks surging 1.63%.
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Source: FIN24
Rand stronger for third day
June 6, 2012--The rand gained one percent against the dollar in early Wednesday trade, strengthening for the third straight day from last week's three-year lows on the back of firmer commodity prices.
Dealers said the currency was going through a natural pull-back from oversold levels at R8.71 last week but would be likely to encounter resistance at R8.30.
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Source: FIN24
IFC and African Development Bank expand local currency finance
June 6, 2012--The International Finance Corporation (www.ifc.org), a member of the World Bank Group, and the African Development Bank (www.afdb.org) are to work together to facilitate local currency lending and bond issuance in Africa.
They agreed to collaborate and benefit from each other’s local currency bond issues. This will enhance their local currency funding capacity to support their clients’ development projects.
On 1 June they signed an ISDA Master Agreement to enter into cross-currency swap transactions and for each it is the first with another multilateral financial institution.
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Source: Africa Markets
JSE tracks global stocks firmer
June 5, 2012--The JSE lifted during its opening session on Tuesday, tracking relatively positive sentiment among investors on bets of economic stimulus by some central banks.
At 09:20 local time‚ the JSE All Share [JSE:J203] index was up 0.29% to 33‚170.92 points‚ with resources gaining 0.60% and gold counters rallying 1.35%‚ while platinum counters dipped 0.10%.
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Source: FIN24
New bonds to be issued this week
June 5, 2012--South Africa may issue five new bonds as early as this week, helping to plug a 10-year benchmark gap and extend the government yield curve by a further seven years, a top Treasury official said on Tuesday.
There is strong and growing demand from international investors for bonds in Africa’s largest economy and biggest debt market, with some analysts even seeing it as a relatively safe haven during the eurozone’s debt crisis.
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Source: FIN24
Rand slightly softer on global concerns
June 4, 2012--The rand softened against the dollar on Monday as fears of a global slowdown dealt another blow to risk sentiment among investors.
At 06:38 GMT, the rand was trading at R8.6035 against the dollar, slightly softer than Friday’s New York close of R8.59.
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Source: FIN24
