<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="612" height="357" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1030878162-612x612-1.jpg" alt="" class="wp-image-400669" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1030878162-612x612-1.jpg 612w, https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1030878162-612x612-1-300x175.jpg 300w" sizes="auto, (max-width: 612px) 100vw, 612px" /><figcaption class="wp-element-caption">World map with charts and graphs as symbols of global finance</figcaption></figure>



NAIROBI, July 1 (Reuters) &#8211; The following company announcements, scheduled economic indicators, debt and currency market moves and political events may affect African markets on Monday.



<h2 class="wp-block-heading" id="h-global-markets">GLOBAL MARKETS</h2>



Asian stocks were subdued on Monday as traders pondered the U.S rates outlook, while the euro rose after the first-round voting in France&#8217;s shock snap election was won by the far-right, albeit with a smaller share than some polls had projected.



<h2 class="wp-block-heading" id="h-world-oil-prices">WORLD OIL PRICES</h2>



Oil prices edged up in early trade on Monday, supported by forecasts of a supply deficit stemming from peak summer fuel consumption and OPEC+ cuts in the third quarter, although global economic headwinds and rising non-OPEC+ output capped gains.



<h2 class="wp-block-heading" id="h-south-africa-markets">SOUTH AFRICA MARKETS</h2>



The South African rand rallied on Friday on optimism that the Democratic Alliance (DA) and African National Congress (ANC) would reach an agreement over cabinet positions, a day after local media reported a major disagreement between the parties.



<h2 class="wp-block-heading" id="h-kenya-markets">KENYA MARKETS</h2>



Kenya&#8217;s shilling eased slightly on Friday as markets awaited the outcome of protests against a now-shelved tax increase plan.



<h2 class="wp-block-heading" id="h-nigeria-security">NIGERIA SECURITY</h2>



At least 18 people were killed and 30 others injured after a series of attacks by suspected female suicide bombers in Nigeria&#8217;s northeastern Borno state on Saturday, the head of the local state emergency management agency said.



<h2 class="wp-block-heading" id="h-ghana-debt">GHANA DEBT</h2>



The International Monetary Fund&#8217;s executive board approved the second review of Ghana&#8217;s $3 billion loan programme on Friday, allowing for the immediate disbursement of around $360 million, the Fund said.



<h2 class="wp-block-heading" id="h-kenya-debt">KENYA DEBT</h2>



Kenyan activists on Friday circulated calls for fresh protests, strikes and sit-ins demanding President William Ruto quit, after nationwide demonstrations forced him to U-turn on proposed tax hikes.



((Compiled by Nairobi Newsroom))

World map with charts and graphs as symbols of global finance

African Markets – Factors to watch on July 1

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="573" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/E4XPLDHJ4FJATLM6TW5UKVG4MI-820x573.jpg" alt="" class="wp-image-502453" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/E4XPLDHJ4FJATLM6TW5UKVG4MI-820x573.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/E4XPLDHJ4FJATLM6TW5UKVG4MI-300x210.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/E4XPLDHJ4FJATLM6TW5UKVG4MI-129x90.jpg 129w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/E4XPLDHJ4FJATLM6TW5UKVG4MI-768x537.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/E4XPLDHJ4FJATLM6TW5UKVG4MI-1536x1074.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/E4XPLDHJ4FJATLM6TW5UKVG4MI-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Opposition Democratic Alliance party leader John Steenhuisen speaks at South Africa&#8217;s parliament in Cape Town, South Africa, December 13, 2022. REUTERS/Esa Alexander/File Photo</figcaption></figure>



JOHANNESBURG, June 30 (Reuters)&nbsp;&#8211;&nbsp;South Africa&#8217;s President Cyril Ramaphosa appointed the Democratic Alliance party&#8217;s leader John Steenhuisen as agriculture minister in his new cabinet, Ramaphosa said in a televised address to the nation on Sunday.



Ramaphosa reappointed the African National Congress&#8217;s Enoch Godongwana as finance minister and named Gwede Mantashe as mineral and petroleum resources minister, while Ronald Lamola was appointed minister of international relations and cooperation.



This is a developing story&#8230;



(Reporting by Bhargav Acharya, Tannur Anders and Alexander Winning)

FILE PHOTO: Opposition Democratic Alliance party leader John Steenhuisen speaks at South Africa’s parliament

South Africa’s Ramaphosa appoints DA’s Steenhuisen as agriculture minister

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="612" height="408" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/istockphoto-1076949610-612x612-1.jpg" alt="" class="wp-image-501467" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/istockphoto-1076949610-612x612-1.jpg 612w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/istockphoto-1076949610-612x612-1-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/istockphoto-1076949610-612x612-1-135x90.jpg 135w" sizes="auto, (max-width: 612px) 100vw, 612px" /></figure>



JOHANNESBURG, June 28 (Reuters)&nbsp;&#8211;&nbsp;The following scheduled political and economic events, equity and currency market moves may affect South African markets on Friday.



POLITICAL EVENTS



Media reports of a major disagreement between the pro-business Democratic Alliance party and President Cyril Ramaphosa over cabinet posts in the government of national unity delaying the announcement of the executive.



ECONOMIC EVENTS



The South African Reserve Bank published the country&#8217;s M3 money supply and private sector credit figures for May.



South Africa&#8217;s government will hold its weekly auction of inflation-linked bonds.



Statistics South Africa will release data on the country&#8217;s May trade and budget balance figures.



SOUTH AFRICAN MARKETS



The South African rand fell sharply on Thursday after media reports of a major disagreement between the pro-business Democratic Alliance (DA) party and President Cyril Ramaphosa over cabinet posts.



The Johannesburg Stock Exchange&#8217;s Top-40 index .JTOPI closed down 0.4%. The benchmark 2030 government bond slumped, as the yield rose 30 basis points to 10.12%.



GLOBAL MARKETS



Asian stocks were on track for a fifth straight month of gains on Friday, bolstered by a growing view that cooling U.S. inflation could prompt the Federal Reserve to ease rates this year, while the yen tumbled to a 38-year low against the dollar.



WALL STREET



U.S. stocks ended Thursday around the unchanged mark as investors awaited fresh inflation data, with the Nasdaq able to eke out a slight gain after data showed a continued slowdown in economic activity, raising investors&#8217; hope for rate cuts.



GOLD



Gold prices eased on Friday, but were set for a third straight quarterly rise, while investors looked forward to U.S. inflation data due later in the day for more clarity on the Federal Reserve&#8217;s interest rate-cut timeline.



EMERGING MARKETS



(Compiled by Tannur Anders; Editing by Janane Venkatraman )

istockphoto-1076949610-612×612-1

South African Markets – Factors to watch on June 28

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="720" height="480" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/image.png" alt="" class="wp-image-501447" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/image.png 720w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/image-300x200.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/image-135x90.png 135w" sizes="auto, (max-width: 720px) 100vw, 720px" /></figure>



NAIROBI, June 28 (Reuters)&nbsp;&#8211;&nbsp;After their stunning success forcing the government to shelve $2.7 billion in tax hikes, young Kenyan activists are setting their sights higher, taking aim at deeply ingrained corruption and misgovernance.



Protesters say the finance bill President William Ruto abandoned on Wednesday was only a symptom of the problems plaguing a country where many young people face dwindling job prospects despite strong economic growth.



The movement has little precedent in its mass mobilisation of Kenyans across ethnic and regional divisions while rejecting any kind of political leadership. Protests in Kenya have historically been led by elites, often ending in power-sharing deals that yielded few tangible benefits for demonstrators.



Protesters now face the challenge of maintaining unity and momentum while pursuing broader, less immediate goals. They will also have to decide how to respond to Ruto&#8217;s offer of dialogue, which the president made on Wednesday without offering specifics.



Writer and activist Nanjala Nyabola said most of those involved in the recent protests were motivated by legitimate, strongly held grievances with the government.



&#8220;Until those grievances are addressed, it&#8217;s unlikely that they&#8217;re going to be willing to make concessions.&#8221;



How the diffuse and leaderless movement, which largely organised via social media, pursues its objectives moving forward remains an open question &#8211; and a source of internal debate.



Christine Odera, co-chair of the Kenya Coalition on Youth, Peace and Security, a civil society organisation, said there was a need for it to develop more formalised structures to advance the interests of young people and speak to the government.



&#8220;If we go organically then we might lose the whole conversation,&#8221; said Odera, who participated in the protests. &#8220;The president has said we need to have conversations. All of us cannot sit in a stadium and have a conversation.&#8221;



Others strongly disagree.



Ojango Omondi, a member of the Social Justice Centres Working Group, a community activist group in a poor district of Nairobi, said creating formal structures and designating national representatives could let the movement be corrupted by politicians.



&#8220;We don&#8217;t need to negotiate anything,&#8221; he said. &#8220;All we want is better living conditions. All we want is the leaders to stop using our resources &#8230; to sponsor their lavish lifestyle.&#8221;



<h2 class="wp-block-heading" id="h-question-of-unity">QUESTION OF UNITY</h2>



Omondi said there was plenty to keep the past week&#8217;s protesters engaged &#8211; from organising funerals for the nearly two dozen people&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL4N3IM15H&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">killed in clashes</a>&nbsp;with police on Tuesday to forcing recall elections against members of parliament.



Another key moment could be the government&#8217;s next bid to pass a finance bill, which is needed to fund expenditures in the upcoming fiscal year. Some protesters suspect the government will still try to jam through tax raises.



In a country where ethnic affinities have traditionally been a key driver of protest, the current youth-driven demonstrations have stood out for building unity around common grievances.



But cracks are already emerging.



Despite Ruto&#8217;s U-turn on the tax hikes, some protesters called for a planned march on the presidential residence to go ahead on Thursday in an attempt to force the president from power. Others rejected the idea as a dangerous gambit.



In the end, there were protests in&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL1N3IP064&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">several cities</a>, although they were smaller than on Tuesday.



In Ruto&#8217;s hometown and political stronghold of Eldoret, where thousands from different ethnic groups took to the streets on Tuesday, a human rights activist said some tensions were resurfacing since the president withdrew the bill.



Nicholas Omito, CEO of the Centre for Human Rights and Mediation, said demonstrators from Ruto&#8217;s Kalenjin ethnic group were arguing that protests should end now that the bill was dropped. Ethnic Kikuyu demonstrators were insisting they should continue until Ruto resigned.



Nyabola, the writer, conceded that the solidarity on display as Kenyans across all walks of life took to the streets in the bold showdown with their government could not undo the country&#8217;s long history of ethnic division.



&#8220;You&#8217;re never going to get rid of it completely,&#8221; she said. &#8220;But for now the class and wealth disparity between politicians and ordinary people has been the focus.&#8221;



(Reporting by Aaron Ross and Giulia ParaviciniAdditional reporting by Edwin OkothEditing by Joe Bavier)

image

After dramatic tax win, Kenyan protesters plot next moves

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2048" height="1439" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/LA24V6GG4VKUROZCEGVVO63DKQ-scaled.jpg" alt="" class="wp-image-424954" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/LA24V6GG4VKUROZCEGVVO63DKQ-scaled.jpg 2048w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/LA24V6GG4VKUROZCEGVVO63DKQ-300x211.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/LA24V6GG4VKUROZCEGVVO63DKQ-820x576.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/LA24V6GG4VKUROZCEGVVO63DKQ-128x90.jpg 128w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/LA24V6GG4VKUROZCEGVVO63DKQ-768x540.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/LA24V6GG4VKUROZCEGVVO63DKQ-1536x1079.jpg 1536w" sizes="auto, (max-width: 2048px) 100vw, 2048px" /><figcaption class="wp-element-caption">A street money changer counts South African Rands in Harare, Zimbabwe, file. REUTERS/Philimon Bulawayo/File Photo</figcaption></figure>



JOHANNESBURG, June 27 (Reuters)&nbsp;&#8211;&nbsp;The South African rand fell sharply on Thursday as traders were spooked by a local media report that there was a major disagreement between the pro-business Democratic Alliance (DA) party and President Cyril Ramaphosa over cabinet posts.



At 1050 GMT, the rand traded at 18.36 against the dollar, around 1% weaker than its previous close.



Ramaphosa&#8217;s African National Congress (ANC) and the DA emerged as the two largest parties in the unity government after the ANC lost its parliamentary majority in an election last month.



The DA is expected to get cabinet positions in return for supporting Ramaphosa&#8217;s re-election as president.



News website News24 reported that Ramaphosa had backtracked on an offer to give the DA the minister of trade, industry and competition position, replacing it with tourism minister, although the overall number of ministerial positions offered remained the same at six.



News24 said the DA&#8217;s leadership had decided to tell Ramaphosa that if he does not stick to a prior agreement struck earlier in the week then &#8220;the deal is off&#8221; between the two parties.



Financial markets are on edge over the composition of the cabinet, as it will give an indication of whether the ANC intends to meaningfully share power with parties including the DA.



&#8220;As the cabinet announcement delay continues and rumours circulate, the rand is likely to experience further selling pressure,&#8221; said Zain Vawda, market analyst at OANDA.



The Johannesburg Stock Exchange&#8217;s Top-40 index was last down around 0.5%. The benchmark 2030 government bond was weaker, as the yield rose 15 basis points to 9.975%.



(Reporting by Tannur Anders; Editing by Alexander Winning and Anil D&#8217;Silva)

FILE PHOTO: A street money changer counts South African Rands in Harare

South African rand drops on news report of discord over cabinet posts

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2048" height="1365" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/22SV2XFFTJKVFKWLT6QATFG6FU-scaled.jpg" alt="" class="wp-image-501050" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/22SV2XFFTJKVFKWLT6QATFG6FU-scaled.jpg 2048w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/22SV2XFFTJKVFKWLT6QATFG6FU-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/22SV2XFFTJKVFKWLT6QATFG6FU-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/22SV2XFFTJKVFKWLT6QATFG6FU-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/22SV2XFFTJKVFKWLT6QATFG6FU-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/22SV2XFFTJKVFKWLT6QATFG6FU-1536x1024.jpg 1536w" sizes="auto, (max-width: 2048px) 100vw, 2048px" /><figcaption class="wp-element-caption">Demonstrators react as police use tear gas to disperse protesters during a demonstration against Kenya&#8217;s proposed finance bill 2024/2025 in Nairobi, Kenya, June 25. REUTERS/Monicah Mwangi</figcaption></figure>



NAIROBI, June 27 (Reuters)&nbsp;&#8211;&nbsp;Kenyan police put up roadblocks on streets leading to the presidential palace on Thursday as some protesters vowed to &#8220;occupy State House&#8221;, despite the president&#8217;s climbdown on proposed tax hikes that sparked a week of demonstrations.



It was not clear how far protesters would be mollified by President William Ruto&#8217;s Wednesday decision to withdraw the finance bill, a day after clashes killed at least 23 people and parliament was briefly stormed and set alight.



Ruto is grappling with the most serious crisis of his two-year-old presidency as the youth-led protest movement has grown rapidly from online condemnations of the tax hikes into mass rallies demanding a political overhaul.



Lacking a formal leadership structure, however, protest supporters were divided on how far to carry the demonstrations.



&#8220;Let&#8217;s not be foolish as we fight for a better Kenya,&#8221; Boniface Mwangi, a prominent social justice activist, said in an Instagram post.



He voiced support for demonstrations on Thursday but opposed calls to invade State House, the president&#8217;s formal offices and residence, a move that he said could spur more violence and be used to justify a crackdown.



In the capital, Nairobi, police and soldiers patrolled the streets on Thursday and blocked access to the State House.



Police fired teargas to disperse several dozen people who had gathered in the centre of the city, although the crowds were nowhere near the size of those in Tuesday&#8217;s mass protests.



Reuters reporters saw army vehicles on the streets after the government deployed the military to help police.



Hundreds of protesters gathered in the port city of Mombasa and in the western city of Kisumu, local television footage showed, although those gatherings appeared peaceful.



While some protest supporters said they would not demonstrate on Thursday as the finance bill had been scrapped, others pledged to press on, saying only Ruto&#8217;s resignation would satisfy them.



&#8220;Right now is not about just the finance bill but about #RutoMustGo,&#8221; political activist and protester Davis Tafari told Reuters in a text message. &#8220;We have to make sure that Ruto and his MPs have resigned and fresh elections are held &#8230; We occupy State House for dignity and justice.&#8221;



Eli Owuor, 34, from Kibera, an informal settlement and a traditional hotbed of protests, also said he was prepared to join a push on to the State House.



&#8220;We may just need to visit Zakayo today in his house to prove that after parliament we can occupy State House,&#8221; he said, using a nickname protesters have given to Ruto that references a a biblical tax collector viewed as corrupt.



<h2 class="wp-block-heading" id="h-dialogue-austerity-are-next-steps">DIALOGUE, AUSTERITY ARE NEXT STEPS</h2>



In a speech on Wednesday, Ruto defended his push to raise taxes on items such as bread, cooking oil and diapers, saying it was justified by the need to cut Kenya&#8217;s high debt, which has made borrowing difficult and squeezed the currency.



But he acknowledged that the public had overwhelmingly rejected the finance bill. He said he would now start a dialogue with Kenyan youth and work on austerity measures, beginning with cuts to the budget of the presidency.



The International Monetary Fund, which has been urging the government to cut its deficit to obtain more funding, said it was closely monitoring the situation in Kenya.



&#8220;We are deeply concerned about the tragic events in Kenya in recent days,&#8221; the IMF said in a statement. &#8220;Our main goal in supporting Kenya is to help it overcome the difficult economic challenges it faces and improve its economic prospects and the well-being of its people.&#8221;



Ratings agency Moody&#8217;s said the shift in focus to cutting spending rather than boosting revenue will complicate the disbursement of future IMF funding and slow the pace of fiscal consolidation.



Analysts at JPMorgan said they had maintained their forecasts for a deficit of 4.5% of GDP in FY2024/2025, but acknowledged the government and IMF targets could be revised in light of recent developments.



They said the Central Bank of Kenya was unlikely to begin cutting rates until the final quarter of this year.



<h2 class="wp-block-heading" id="h-broad-appeal">BROAD APPEAL</h2>



Unlike previous demonstrations in Kenya called by political figures and often mobilised on the basis of ethnicity, the current protests have appealed broadly to those weary of rising living costs and endemic corruption.



From big cities to rural areas, most of Kenya&#8217;s 47 counties saw protests on Tuesday, even in Ruto&#8217;s hometown of Eldoret in his ethnic Kalenjin heartland.



At least 23 people were killed nationwide and 30 were being treated for bullet wounds, the Kenya Medical Association said. Medical officials in Nairobi said scores were injured.



(Reporting by Aaron Ross; Additional reporting by Giulia Paravicini, Monicah Mwangi and Olivia Kumwenda-Mtambo; Writing by Sharon Singleton; Editing by Clarence Fernandez and Philippa Fletcher)

Demonstration against Kenya’s proposed finance bill 2024/2025 in Nairobi

Kenya braces for fresh protests despite president’s tax climbdown

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="541" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/06/E2LAHPZEEFN6VLWP7WHSXPENYQ-820x541.jpg" alt="" class="wp-image-425628" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/06/E2LAHPZEEFN6VLWP7WHSXPENYQ-820x541.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/E2LAHPZEEFN6VLWP7WHSXPENYQ-300x198.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/E2LAHPZEEFN6VLWP7WHSXPENYQ-136x90.jpg 136w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/E2LAHPZEEFN6VLWP7WHSXPENYQ-768x507.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/E2LAHPZEEFN6VLWP7WHSXPENYQ-1536x1013.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/E2LAHPZEEFN6VLWP7WHSXPENYQ-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: The logo of South Africa&#8217;s central reserve bank is seen during the delivery of a keynote address by South Africa&#8217;s central bank governor, Lesetja Kganyago, at the University of the Witwatersrand in Johannesburg, South Africa, November 1, 2022. REUTERS/Siphiwe Sibeko/File Photo</figcaption></figure>



JOHANNESBURG, June 27 (Reuters) &#8211; South Africa recorded foreign direct investment inflows of 24.4 billion rand ($1.34 billion) in the first quarter of 2024, up from a revised 2.5 billion rand in the previous quarter, central bank data showed on Thursday.



The South African Reserve Bank said in its Quarterly Bulletin that the inflows were largely due to the acquisition of a local vehicle-tracking company by an overseas firm, without naming the company that was bought.



Portfolio investments recorded outflows for the seventh consecutive quarter of 52.0 billion rand in the first three months of 2024, compared to outflows of 9.0 billion rand in the fourth quarter of 2023.



The portfolio outflows reflected the disposal by non-residents of 24.2 billion rand of domestic equities and 27.8 billion rand of domestic debt securities.



&#8220;The outflow recorded for debt securities in the first quarter of 2024 could mainly be attributed to the maturity of a $1.5 billion international bond of national government,&#8221; the Reserve Bank said.



($1 = 18.1575 rand) 



(Reporting by Kopano Gumbi; Editing by Alexander Winning)

FILE PHOTO: South Africa’s central bank governor to delivers keynote address

South Africa’s FDI inflows pick up in first quarter – central bank

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="541" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/IBU6Z3WQIRPDRFTLELJJA6WZCM-820x541.jpg" alt="" class="wp-image-501074" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/IBU6Z3WQIRPDRFTLELJJA6WZCM-820x541.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/IBU6Z3WQIRPDRFTLELJJA6WZCM-300x198.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/IBU6Z3WQIRPDRFTLELJJA6WZCM-136x90.jpg 136w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/IBU6Z3WQIRPDRFTLELJJA6WZCM-768x507.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/IBU6Z3WQIRPDRFTLELJJA6WZCM-1536x1014.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/IBU6Z3WQIRPDRFTLELJJA6WZCM-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: A fruits and vegetables vendor (L) pushes a trolly as he sets up his stall in Soweto, south west of Johannesburg, South Africa June 1, 2017. REUTERS/Siphiwe Sibek/File Photo</figcaption></figure>



June 27 (Reuters)&nbsp;&#8211;&nbsp;South Africa&#8217;s consumer confidence improved slightly in the second quarter due to fewer hours of load-shedding and a drop in fuel and food prices, but uncertainty around national elections kept some consumers worried, data released on Thursday showed.



The consumer confidence index (CCI), sponsored by First National Bank (FNB) and compiled by the Bureau for Economic Research (BER), improved to minus 12 points in the quarter, from minus 15 points in the first quarter.



&#8220;Positive developments such as the cessation of load-shedding during the second quarter, substantial cuts in fuel prices in June &#8230; a significant deceleration in food inflation likely buoyed confidence levels, particularly among low- and middle-income consumers,&#8221; FNB Chief Economist Mamello Matikinca-Ngwenya said.



However, the confidence among high-income households remained largely unchanged in the run-up to the national elections and amid persistently high interest rates.



&#8220;High interest rates and uncertainty over which parties would form part of South Africa&#8217;s government of national unity (GNU) probably kept the lid on high-income confidence,&#8221; Ngwenya said.



&#8220;Provided that the GNU remains intact and the JSE and rand exchange rate hold onto their recent gains, there is scope for an improvement in high-income confidence during the third quarter.&#8221;



The African National Congress (ANC) and its largest rival, the white-led, pro-business Democratic Alliance have agreed to work together in South Africa&#8217;s new government of national unity.



Investors anticipate that the unity government will pick up the pace on existing reform plans for electricity, rail and port sectors needed to revive an economy that has barely grown in the last decade and has an unemployment rate that is among the highest in the world.



(Reporting by Prerna Bedi in Bengaluru; Editing by Savio D&#8217;Souza)

A fruits and vegetables vendor pushes a trolly as he sets up his stall in Soweto, south west of Johannesburg

S. Africa consumer confidence recovers in Q2, survey shows

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="612" height="408" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1076949610-612x612-1.jpg" alt="" class="wp-image-400697" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1076949610-612x612-1.jpg 612w, https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1076949610-612x612-1-300x200.jpg 300w" sizes="auto, (max-width: 612px) 100vw, 612px" /><figcaption class="wp-element-caption">Double exposure of coin stack with city background and world map, financial graph, world map and global network business concept idea, element by NASA.</figcaption></figure>



JOHANNESBURG, June 27 (Reuters)&nbsp;&#8211;&nbsp;The following scheduled political and economic events, equity and currency market moves may affect South African markets on Thursday.



<h2 class="wp-block-heading" id="h-political-events">POLITICAL EVENTS</h2>



Negotiations over cabinet positions continue between the 10 political parties that make up the government of national unity. The cabinet could be announced on Thursday, judging by comments by party officials.



<h2 class="wp-block-heading" id="h-economic-events">ECONOMIC EVENTS</h2>



The South African Reserve Bank will release the June Quarterly Bulletin.



Statistics South Africa will publish May producer price inflation figures.



<h2 class="wp-block-heading" id="h-south-african-markets">SOUTH AFRICAN MARKETS</h2>



The South African rand edged lower on Wednesday, as an announcement on President Cyril Ramaphosa&#8217;s cabinet appeared imminent amid uncertainty over key appointments in the executive.



On the stock market, the Top-40 index closed 0.5% lower.



<h2 class="wp-block-heading" id="h-global-markets">GLOBAL MARKETS</h2>



Asian shares fell and bond yields spiked on nervousness about inflation on Thursday, while the yen&#8217;s slide past 160-per-dollar had currency traders bracing for Japan to step in and steady it.



<h2 class="wp-block-heading" id="h-wall-street">WALL STREET</h2>



Major U.S. stock indexes closed with modest gains on Wednesday after a choppy trading session, with investors holding their cards close to the vest ahead of a presidential debate and an inflation report closely watched by Federal Reserve policy makers.



<h2 class="wp-block-heading" id="h-gold">GOLD</h2>



Gold prices steadied on Thursday after falling to a two-week low in the previous session, while investors awaited U.S. inflation data for insights into how soon the Federal Reserve will cut interest rates.



&#8211; &#8211; &#8211; &#8211;



Some of the main stories out in the South African press:



<h2 class="wp-block-heading" id="h-business-day">BUSINESS DAY</h2>



&#8211; Bank of America raises red flag over stability of GNU



&#8211; Ramaphosa draws DA closer as he prepares to announce cabinet



(Compiled by Tannur Anders; Editing by Mark Potter)

South African Markets – Factors to watch on June 27

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="612" height="357" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1030878162-612x612-1.jpg" alt="" class="wp-image-400669" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1030878162-612x612-1.jpg 612w, https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1030878162-612x612-1-300x175.jpg 300w" sizes="auto, (max-width: 612px) 100vw, 612px" /><figcaption class="wp-element-caption">World map with charts and graphs as symbols of global finance</figcaption></figure>



NAIROBI, June 27 (Reuters) &#8211; The following company announcements, scheduled economic indicators, debt and currency market moves and political events may affect African markets on Thursday.



<h2 class="wp-block-heading" id="h-global-markets">GLOBAL MARKETS</h2>



Asian shares fell and bond yields spiked on nervousness about inflation on Thursday, while the yen&#8217;s slide past 160-per-dollar had currency traders bracing for Japan to step in and steady it.



<h2 class="wp-block-heading" id="h-world-oil-prices">WORLD OIL PRICES</h2>



Oil prices dipped on Thursday as a surprise build in U.S. stockpiles fuelled fears about slow demand from the world&#8217;s top oil consumer, though declines were capped by worries a potential expansion of the Gaza war may disrupt Middle East supplies.



<h2 class="wp-block-heading" id="h-south-africa-markets">SOUTH AFRICA MARKETS</h2>



The South African rand edged lower on Wednesday, as an announcement on President Cyril Ramaphosa&#8217;s cabinet appeared imminent amid uncertainty over key appointments in the executive.



<h2 class="wp-block-heading" id="h-nigeria-refinery">NIGERIA REFINERY</h2>



Nigeria&#8217;s Dangote Refinery is operating normally after a fire at its effluent treatment plant, it said on Wednesday, after videos circulated online of dark plumes of smoke at the 650,000 barrel-per-day facility.



<h2 class="wp-block-heading" id="h-kenya-markets">KENYA MARKETS</h2>



The Kenyan shilling was flat on Wednesday, as traders waited to see how protests against tax hikes unfolded.



<h2 class="wp-block-heading" id="h-kenya-budget">KENYA BUDGET</h2>



Kenyan President William Ruto on Wednesday withdrew planned tax hikes, bowing to pressure from protesters who had stormed parliament, launched demonstrations across the country and threatened more action this week.



<h2 class="wp-block-heading" id="h-zambia-debt">ZAMBIA DEBT</h2>



The International Monetary Fund (IMF) said on Wednesday its executive board had completed a third review of Zambia&#8217;s Extended Credit Facility and approved an immediate disbursement of some $569.6 million.



((Compiled by Nairobi Newsroom))

African Markets – Factors to watch on June 27

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107004870-16427966702022-01-21t201709z_969185203_rc2w3s99wb9o_rtrmadp_0_argentina-imf-mexico-820x462.jpeg" alt="" class="wp-image-420118" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107004870-16427966702022-01-21t201709z_969185203_rc2w3s99wb9o_rtrmadp_0_argentina-imf-mexico-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107004870-16427966702022-01-21t201709z_969185203_rc2w3s99wb9o_rtrmadp_0_argentina-imf-mexico-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107004870-16427966702022-01-21t201709z_969185203_rc2w3s99wb9o_rtrmadp_0_argentina-imf-mexico-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107004870-16427966702022-01-21t201709z_969185203_rc2w3s99wb9o_rtrmadp_0_argentina-imf-mexico-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107004870-16427966702022-01-21t201709z_969185203_rc2w3s99wb9o_rtrmadp_0_argentina-imf-mexico.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">The new economic measures laid out by the U.K. government “will likely increase inequality”, according to a spokesperson from the International Monetary Fund.
Yuri Gripas | Reuters</figcaption></figure>



June 26 (Reuters)&nbsp;&#8211;&nbsp;The International Monetary Fund (IMF) said on Wednesday its executive board had completed a third review of Zambia&#8217;s Extended Credit Facility and approved an immediate disbursement of some $569.6 million.



The Fund&#8217;s board also approved a request to increase its financial support from $1.3 billion to $1.7 billion to help the southern African country respond to a severe drought, which has caused crop losses and affected power generation.



In a statement, IMF official Antoinette Sayeh said Zambian authorities had made progress on economic and structural reforms while addressing humanitarian challenges due to the drought.



&#8220;Going ahead, coordinated macroeconomic policies, continued efforts to restore fiscal and debt sustainability, and consistent reform implementation would be key to addressing the impact of the drought, preserving macroeconomic stability, and bolstering growth,&#8221; said Sayeh, the Fund&#8217;s deputy managing director.



Copper-rich Zambia dragged itself out of default this month after a debt-restructuring process that took more than three-and-a-half years and was a cautionary tale for the G20&#8217;s Common Framework mechanism designed to help low-income countries tackle unsustainable debt burdens.



The protracted debt rework has deterred investment, constrained economic growth and weighed on local financial markets.



Zambia&#8217;s finance minister asked parliament last week to approve additional spending of 41.9 billion kwacha ($1.65 billion) to help repay external debt and address the drought.



(Reporting by Tannur Anders and Harshita Meenaktshi; editing by Diane Craft and Rami Ayyub)

107004870-16427966702022-01-21t201709z_969185203_rc2w3s99wb9o_rtrmadp_0_argentina-imf-mexico

IMF approves $570 mln Zambia payout, increases loan to $1.7 bln

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2048" height="1366" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/10/Kenya-President-reshuffles-cabinet-swaps-foreign-affairs-minister-scaled.jpg" alt="" class="wp-image-427955" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/10/Kenya-President-reshuffles-cabinet-swaps-foreign-affairs-minister-scaled.jpg 2048w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/Kenya-President-reshuffles-cabinet-swaps-foreign-affairs-minister-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/Kenya-President-reshuffles-cabinet-swaps-foreign-affairs-minister-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/Kenya-President-reshuffles-cabinet-swaps-foreign-affairs-minister-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/Kenya-President-reshuffles-cabinet-swaps-foreign-affairs-minister-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/Kenya-President-reshuffles-cabinet-swaps-foreign-affairs-minister-1536x1024.jpg 1536w" sizes="auto, (max-width: 2048px) 100vw, 2048px" /><figcaption class="wp-element-caption">FILE PHOTO: Kenya&#8217;s President William Ruto attends the Sustainable Development Goals (SDG) Summit at United Nations headquarters in New York City, New York, U.S., September 18, 2023. REUTERS/Caitlin Ochs/File Photo</figcaption></figure>



NAIROBI, June 26 (Reuters) &#8211; Kenya&#8217;s president on Wednesday withdrew planned tax rises, bowing to pressure from protesters who had stormed parliament, launched demonstrations across the country and threatened more action this week.



William Ruto said he would not sign a finance bill including the hikes a day after violent clashes between police and protesters at the assembly and nationwide left at least 23 people dead and scores wounded, according to medics.



&#8220;Listening keenly to the people of Kenya who have said loudly that they want nothing to do with this finance bill 2024, I concede. And therefore, I will not sign the 2024 finance bill, and it shall subsequently be withdrawn,&#8221; he said in a televised address.



Ruto said he would now start a dialogue with Kenyan youth, without going into details, and work on austerity measures &#8211; starting with cuts to the budget of the presidency &#8211; to make up the difference in the country&#8217;s finances.



The move will be seen as a major victory for a week-old protest movement that grew from online condemnations of tax increases into mass rallies demanding a political overhaul, in the most serious crisis of Ruto&#8217;s two-year-old presidency.



It may see off the immediate threat of more unrest, but leaves Ruto still caught between the competing demands of his hard-pressed citizens and of lenders such as the IMF &#8211; which is urging the government to cut deficits to obtain more financing.



On Tuesday, police opened fire on crowds who massed around parliament and later broke into the assembly&#8217;s compound, minutes after lawmakers had voted through the tax measures and sent them on to the president.



The Nation newspaper documented protests in at least 35 of Kenya&#8217;s 47 counties, from big cities to rural areas &#8211; even in Ruto&#8217;s hometown of Eldoret in his ethnic Kalenjin heartland.



At least 23 people were killed across the East African country and another 30 were being treated for bullet wounds, the Kenya Medical Association said on Wednesday. Medical officials in Nairobi said scores had been injured.



Protesters had earlier vowed to keep up their demonstrations in messages on social media using the hashtag #tupatanethursday, or &#8220;see you on Thursday&#8221; in a mix of Swahili and English.



Posts on social media had urged people to occupy State House, the president&#8217;s office and residence, on Thursday, and the local offices of the World Bank and the International Monetary Fund (IMF) on Friday, though it was not immediately clear if the calls came from individuals or a broader movement.



Heavily armed police patrolled the streets of the capital Nairobi, which were quieter than usual on Wednesday.



The protests began as an online outpouring of anger by young, tech-savvy Kenyans at proposed taxes on bread and diapers and evolved into a nationwide movement calling for the scrapping of the entire finance bill including the taxes.



Thousands took to the streets of Nairobi and several other cities during two days of protests last week as an online movement gathered momentum.



Protests in Kenya have usually been called by political leaders who can be amenable to negotiated settlements. But the young Kenyans in the current demonstrations have no official leader and they have been growing increasingly bold in their demands.



Lawmakers had already removed some tax hikes from the final version of the finance bill on Tuesday, including ones on bread and cooking oil, but inserted others in an effort to avoid a budget gap.

FILE PHOTO: Sustainable Development Goals (SDG) Summit at United Nations headquarters in New York

Kenya president backs down on tax rises after deadly protests

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/GettyImages-2158704243-820x547.jpg" alt="" class="wp-image-500684" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/GettyImages-2158704243-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/GettyImages-2158704243-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/GettyImages-2158704243-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/GettyImages-2158704243-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/GettyImages-2158704243-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/GettyImages-2158704243-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">NAIROBI, KENYA &#8211; JUNE 25: People clash with police during a protest against the tax hikes in planned &#8216;Finance Bill 2024&#8217; as they march to the parliament building in Nairobi, Kenya on June 25, 2024. (Photo by Gerald Anderson/Anadolu via Getty Images)</figcaption></figure>



NAIROBI, June 26 (Reuters) &#8211; As John Aron headed out to join the protests raging outside parliament, he felt something huge had already shifted in Kenyan politics, jolting it away from its decades of dominance by party strongmen and ethnic loyalties.



At least eight people died when police opened fire on crowds trying to storm the assembly to protest against tax hikes on Tuesday. President William Ruto blamed &#8220;criminals&#8221;. Aron, from Nairobi&#8217;s Kibera slum, said the demonstrators were part of a brand new movement.



&#8220;It is going to unite the youth and the old like never before,&#8221; the 29-year-old told Reuters.



Over just one week, what began as an online outpouring of anger by young, tech-savvy Kenyans at proposed taxes on bread and diapers has morphed into nationwide movement untethered from the politicians who have traditionally rallied the masses.



Ruto&#8217;s allies initially dismissed the protests as a fit of pique by wealthy, entitled kids.



&#8220;They arrive at the protests in Uber. When they leave the protests, they go to KFC to eat chicken,&#8221; parliament majority leader Kimani Ichung&#8217;wah told supporters last week.



But the protests have built up into a much wider groundswell of anger that has become the most serious crisis of Ruto&#8217;s two-year-old presidency, leaving him fumbling for a response.



&#8220;It&#8217;s the people against the government,&#8221; Ronnie Baron, a 30-year-old English literature teacher&nbsp;said in the heart of the crowd in downtown Nairobi on Tuesday.



The slogans on the streets and social media have shifted from tax to calls for a complete political overhaul. &#8220;Ruto must go!&#8221; crowds chanted.



&#8220;Our leaders are saying they are going to sit down with the youth. And talk to us,&#8221; protester Mitchell Mwamodo said. But &#8220;we don&#8217;t have a leader. I am not trying to have a conversation. We are not ready to back down.&#8221;



Ruto&nbsp;had said on Sunday that he wanted to&nbsp;engage with the protest movement and praised it for staging earlier more peaceful demonstrations.



But as the rallies spread, authorities switched from the carrot to the stick, clashing with demonstrators across the country on Tuesday.



&#8220;They are just trying to find out which hand to shake and which hand to cut off,&#8221; said 37-year-old Mary Ngigi as tear gas swirled around her on Tuesday. &#8220;But we don&#8217;t even have any leaders.&#8221;



<h2 class="wp-block-heading" id="h-i-wish-i-was-born-in-another-country">&#8216;I WISH I WAS BORN IN ANOTHER COUNTRY&#8217;</h2>



Many said they had had enough of a political system under which the big parties took turns in power and funnelled jobs and opportunities to supporters and people from their ethnic groups.



&#8220;Our parents failed us. They voted along tribal lines,&#8221; 26-year-old Derick Kolito told Reuters. He said he had a master&#8217;s degree in accounts but had not managed to find a job.



&#8220;I am the son of peasants. You must have a godfather to get a job &#8230; I wish I was born in another country.&#8221;



Division among the main ethnic groups have traditionally been a key driver of politics and protest, with members of one group coming out against what they see as favouritism towards another.



But at demonstrations and in online forums where they have gathered to discuss and strategise, protesters have stuck to common grievances including steep rises in living costs and widespread corruption.



The protests have cut across Kenya&#8217;s geographic, social and ethnic landscape.



The Nation newspaper documented protests in at least 35 of Kenya&#8217;s 47 counties, from big cities to rural areas &#8211; even in Ruto&#8217;s hometown of Eldoret in his ethnic Kalenjin heartland.



Westen Shilaho, a scholar who has studied Kenyan protest movements, said the political elite have traditionally used &#8220;the ethnic card&#8221; to enhance their own power.



&#8220;Now that that one is not working in this context, they will try to insert the class card,&#8221;&nbsp;he said.



Veteran anti-corruption activist John Githongo said there was room for de-escalation &#8220;but it requires tremendous political creativity and humility on the part of the government.&#8221;



Parliamentarians&nbsp;did make some&nbsp;concessions to the protesters by removing some of the taxes in the finance bill &#8211; though they then added some others to&nbsp;reduce the deficit.



Minutes after they passed the legislation on Tuesday, protesters entered the parliamentary compound, pitching Kenyan democracy into uncharted waters.



By Wednesday morning, a new hashtag was trending on social media &#8211; #tupatanethursday, a mix of Swahili and English meaning &#8220;see you on Thursday&#8221;.



(Editing by Joe Bavier; Editing by Andrew Heavens)

Protest against tax hike in Kenya

Kenya’s youth-led protest movement leaves Ruto fumbling for a response

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/GettyImages-2017194273-820x547.jpg" alt="" class="wp-image-500666" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/GettyImages-2017194273-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/GettyImages-2017194273-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/GettyImages-2017194273-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/GettyImages-2017194273-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/GettyImages-2017194273-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/GettyImages-2017194273-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">JP Morgan headquarters at Canary Wharf financial district at the heart of Canary Wharf financial district on 6th February 2024 in London, United Kingdom. Canary Wharf is an area located near the Isle of Dogs in the London Borough of Tower Hamlets and is defined by the Greater London Authority as being part of London&#8217;s central business district. Along with the City of London, it constitutes one of the main financial centres in the United Kingdom and the world, containing many high-rise buildings including the third-tallest in the UK, One Canada Square. (photo by Mike Kemp/In Pictures via Getty Images)</figcaption></figure>



June 25 (Reuters)&nbsp;&#8211;&nbsp;India&#8217;s imminent inclusion in the world&#8217;s most widely followed emerging market bond index, JPMorgan&#8217;s GBI-EM, is expected to draw a combined $11 billion away from South Africa, Poland and Thailand&#8217;s local markets, the bank&#8217;s analysts have estimated.



The Wall Street lender said India&#8217;s entry, which starts on Friday and will take 10 months to complete, was likely to pull $4.7 billion from South Africa, $3.3 billion from Poland and $3.2 billion from Thailand.



It will also pull $2.9 billion and $2.5 billion from the Czech Republic and Chile respectively, it added.



&#8220;For EM-dedicated investors, we view India&#8217;s index inclusion as a zero-sum game and expect outflows from other EM local bond markets to accommodate,&#8221; JPMorgan&#8217;s strategists led by Michael Harrison said in a note.



On a broader level, the Europe, Middle East and Africa (EMEA) area is estimated to see the largest regional hit to index weight.



EMEA EM&#8217;s aggregate weight is expected to drop to 26.2% by March when India&#8217;s inclusion is complete compared to around 32% at the start of this month and 40% in 2021, before Russia&#8217;s 2022 exclusion from the index following its invasion of Ukraine.



International investors have bought more than $10 billion of Indian government bonds in the nine months since India&#8217;s inclusion was announced in September, taking their ownership to a record high.



&#8220;Index-related inflows to date&#8230; suggest 32-40% of the expected total of $20-25 billion of index-related inflows to India have already played out,&#8221; Harrison added.



Bond indexes like JPMorgan&#8217;s are influential because investment funds and other types of money managers use them as performance benchmarks which effectively informs what they tend to buy and sell.



In contrast to South Africa and the others, China, Indonesia and Mexico are not expected to see any reductions in their 10% GBI-EM index weights &#8211; the maximum one country can have, and the level India will have reached by March.



Latin America is expected to see a modest decrease, while EM Asia&#8217;s index weightage is estimated to increase, JPMorgan added.



(Reporting by Siddarth S and Johann M Cherian in Bengaluru and Marc Jones in London; Editing by Jan Harvey)

JP Morgan Headquarters At Canary Wharf

India’s JPMorgan bond index entry to suck $11 billion from S.Africa, Poland and Thailand

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="588" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/YDXUHLFUPRP4RNSFLEWADBZOR4-820x588.jpg" alt="" class="wp-image-500391" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/YDXUHLFUPRP4RNSFLEWADBZOR4-820x588.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/YDXUHLFUPRP4RNSFLEWADBZOR4-300x215.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/YDXUHLFUPRP4RNSFLEWADBZOR4-125x90.jpg 125w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/YDXUHLFUPRP4RNSFLEWADBZOR4-768x551.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/YDXUHLFUPRP4RNSFLEWADBZOR4-1536x1102.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/YDXUHLFUPRP4RNSFLEWADBZOR4-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO &#8211; The tower of the headquarters of the Bank for International Settlements (BIS) is seen in Basel, Switzerland March 18, 2021. REUTERS/Arnd Wiegmann</figcaption></figure>



LONDON, June 25 (Reuters)&nbsp;&#8211;&nbsp;Central banks should embrace the benefits of artificial intelligence (AI) the Bank for International Settlements (BIS)has said, but stressed the technology should not replace humans when it comes to setting interest rates.



In its first major report into the rapidly advancing world of AI, the central banking umbrella group said policymakers need to harness its immense power to monitor data in real time in order to &#8220;sharpen&#8221; their inflation-predicting abilities.



That was something found badly wanting in the wake of COVID-19 and Russia&#8217;s invasion of Ukraine when the U.S. Federal Reserve, ECB and other major central banks all failed to grasp the strength of the global inflation surge.



New AI models should reduce the risk of a repeat although their untested nature and the fact they can &#8220;hallucinate&#8221; mean they should not become robo-ratesetters, Cecilia Skingsley, a top official at the BIS, said.



&#8220;We like to hold humans accountable,&#8221; the former Swedish central banker said, referring to the crucial role borrowing costs play in society and the need for judgment.



&#8220;So I can&#8217;t really see a future where an AI will be setting (interest) rates.&#8221;



The BIS, often dubbed the central bankers&#8217; central bank because of the joint work it does, already has eight projects involving AI.



Hyun Song Shin, its head of research and top economic adviser, said policymakers should not view it as &#8220;something magical&#8221; but did say it can help find needles in haystacks and spot vulnerabilities in financial systems.



The technology is also likely to radically reshape labour markets, impacting productivity and economic growth. Widespread adoption could see firms adjust prices more quickly in response to macro-economic changes with repercussions for inflation.



The BIS cautioned that AI also introduces risks, such as new types of cyber attacks, and may amplify existing ones, such as herding, bank runs and financial asset fire sales.



&#8220;The call for action to central banks is to foster a community of practice,&#8221; Shin said. &#8220;To share experience, to share best practice, but also to share data and the models themselves.&#8221;



(Reporting by Marc Jones; editing by Jason Neely)

FILE PHOTO – The tower of the Bank for International Settlements is seen in Basel

Central banks must prepare for profound impact of AI, BIS says

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/IDQEFEBXZ5P77DRBHHFL7D5QSI-820x547.jpg" alt="" class="wp-image-500343" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/IDQEFEBXZ5P77DRBHHFL7D5QSI-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/IDQEFEBXZ5P77DRBHHFL7D5QSI-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/IDQEFEBXZ5P77DRBHHFL7D5QSI-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/IDQEFEBXZ5P77DRBHHFL7D5QSI-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/IDQEFEBXZ5P77DRBHHFL7D5QSI-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/IDQEFEBXZ5P77DRBHHFL7D5QSI-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: U.S. currency is seen in this picture illustration taken March 6, 2020. REUTERS/Mike Segar/Illustration/File Photo</figcaption></figure>



WASHINGTON, June 25 (Reuters)&nbsp;&#8211;&nbsp;The U.S. dollar remains the world&#8217;s primary reserve currency, and neither the euro nor the so-called BRICS countries have been able to reduce global reliance on the dollar, a new study by the Atlantic Council&#8217;s GeoEconomics Center shows.



The group&#8217;s &#8220;Dollar Dominance Monitor&#8221; said the dollar continued to dominate foreign reserve holdings, trade invoicing, and currency transactions globally and its role as the primary global reserve currency was secure in the near and medium term.



Dollar dominance — the outsized role of the U.S. dollar in the world economy — has been strengthened recently given the robust U.S. economy, tighter monetary policy and heightened geopolitical risks, even as economic fragmentation has strengthened a push by BRICS countries to shift into other international and reserve currencies.



The Atlantic Council report said Western sanctions on Russia imposed by the Group of Seven advanced economies after Moscow&#8217;s invasion of Ukraine had accelerated efforts by the BRICS countries to develop a currency union, but the group had been unable to make progress on its de-dollarization efforts.



BRICS is an intergovernmental organization made up of Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia, and the United Arab Emirates.



The council said China&#8217;s Cross-Border Interbank Payment System (CIPS) added 62 direct participants in the 12 months to May 2024, an increase of 78%, bringing the total to 142 direct participants and 1,394 indirect participants.



Negotiations around an intra-BRICS payment system were still in the nascent stages, but bilateral and multilateral agreements within the group could form the basis for a currency exchange platform over time. However, these agreements were not easily scalable, since they were negotiated individually, the report said.



It noted that China has actively supported renminbi liquidity through swap lines with its trade partners, but the share of renminbi in global foreign currency reserves dropped to 2.3% from the peak of 2.8% in 2022.



&#8220;This is possibly because of reserve managers’ concern about China’s economy, Beijing’s position on the Russia-Ukraine war, and a potential Chinese invasion of Taiwan contributing to the perception of the renminbi as a geopolitically risky reserve currency,&#8221; the report said.



The euro, once considered a competitor to the dollar&#8217;s international role, was also weakening as an alternative currency, with those looking to reduce their risk exposure turning to gold instead, the report said.



It said Russian sanctions had made it clear to reserve managers that the euro was exposed to similar geopolitical risks as the dollar. Concerns around macroeconomic stability, fiscal consolidation, and the lack of a European capital markets union also hurt the euro’s international role, it said.



(Reporting by Andrea Shalal; Editing by Andrea Ricci)

FILE PHOTO: U.S. currency is seen in this picture illustration

US dollar’s dominance secure, BRICS see no progress on de-dollarization -report

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/03/IQMT7SFA2RNQLAQHUEOA2VEMMQ-820x547.jpg" alt="" class="wp-image-423556" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/03/IQMT7SFA2RNQLAQHUEOA2VEMMQ-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/IQMT7SFA2RNQLAQHUEOA2VEMMQ-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/IQMT7SFA2RNQLAQHUEOA2VEMMQ-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/IQMT7SFA2RNQLAQHUEOA2VEMMQ-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/IQMT7SFA2RNQLAQHUEOA2VEMMQ-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/IQMT7SFA2RNQLAQHUEOA2VEMMQ-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Illustration photo shows a two-rand coin above a South African flag April 12, 2017. REUTERS/Thomas White/Illustration</figcaption></figure>



JOHANNESBURG, June 25 (Reuters)&nbsp;&#8211;&nbsp;The South African rand clawed back some losses in early trade on Tuesday, as local media reported progress in negotiations over cabinet positions between the two biggest parties in the unity government.



At 0650 GMT, the rand traded at 18.0750 against the dollar, more than 0.2% stronger than its previous close. The currency fell about 0.8% against the dollar on Monday.



Markets have been on tenterhooks in the lead-up to the announcement of President Cyril Ramaphosa&#8217;s new cabinet, with signs of friction between the African National Congress (ANC) and the Democratic Alliance (DA) on Monday contributing to the rand&#8217;s fall.



But local news outlets including News24 said talks between the ANC and DA were moving forward after a meeting between Ramaphosa and DA leader John Steenhuisen on Monday. News24 reported a deal may be reached soon which would allow Ramaphosa to announce his executive by Wednesday.



&#8220;Market participants are likely to focus on how many and which ministerial positions the pro-business Democratic Alliance will get in the new cabinet. The more and the more senior, the better (for markets),&#8221; Commerzbank analysts said in a research note.



The ANC lost its parliamentary majority in an election last month, forcing it to share power for the first time since coming to power at the end of apartheid 30 years ago.



In total 10 political parties have agreed to join the unity government.



South Africa&#8217;s benchmark 2030 government bond was stronger in early deals, with the yield down 7 basis points to 9.785%.



(Reporting by Tannur Anders; Editing by Alexander Winning and Andrew Heavens)

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Reuters

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South Africa’s Ramaphosa appoints DA’s Steenhuisen as agriculture minister

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After dramatic tax win, Kenyan protesters plot next moves

South African rand drops on news report of discord over cabinet posts

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India’s JPMorgan bond index entry to suck $11 billion from S.Africa, Poland and Thailand

Central banks must prepare for profound impact of AI, BIS says

US dollar’s dominance secure, BRICS see no progress on de-dollarization -report

South African rand claws back some losses on reports cabinet talks progress

News Tips

Advertise With Us

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