<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="615" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/ASNTL4445RJTLFIZ464UIMHVRQ-820x615.jpg" alt="" class="wp-image-543315" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/ASNTL4445RJTLFIZ464UIMHVRQ-820x615.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/ASNTL4445RJTLFIZ464UIMHVRQ-300x225.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/ASNTL4445RJTLFIZ464UIMHVRQ-120x90.jpg 120w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/ASNTL4445RJTLFIZ464UIMHVRQ-768x576.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/ASNTL4445RJTLFIZ464UIMHVRQ-1536x1152.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/ASNTL4445RJTLFIZ464UIMHVRQ-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: People shop at a fresh food market in Oyingbo, Lagos, Nigeria December 17, 2021. Picture taken December 17, 2021. REUTERS/Nneka Chile/File Photo</figcaption></figure>



ABUJA, Oct 17 (Reuters)&nbsp;&#8211;&nbsp;Nigeria is beginning to reap the benefits of significant policy reforms following a near fiscal crisis in 2020, but must stay the course, the World Bank said on Thursday.



President Bola Tinubu has instituted reforms including ending a decades-old petrol subsidy and devaluing the currency to try to boost output, which has been sluggish for about a decade.



World Bank lead economist for Nigeria Alex Sienaert said that Nigeria&#8217;s fiscal deficit has reduced from 6.2% of Gross Domestic Product (GDP) in the first half of last year to 4.4% in the first half of this year, with the reforms leading to robust growth in service sectors, stability in the oil sector, and improvements in the foreign exchange market.



&#8220;We are seeing a fiscal consolidation underway with the fiscal deficit shrinking and that&#8217;s driven by a combination of expenditure being roughly constant in real terms, and revenues which are surging,&#8221; Sienaert said during a presentation in the capital Abuja.



&#8220;This surge in revenues is largely due to the removal of the implicit forex subsidy that was happening before, which was even larger than the petrol subsidy, which we talk a lot about,&#8221; he said.



The World Bank expects Nigeria&#8217;s economy to grow at 3.3% this year, rising to 3.6% in 2025.



Nigeria&#8217;s fiscal crisis had been mounting following two economic recessions in the last eight years due to a combination of economic mismanagement and policy challenges.



The recent reforms, including a focus on price stability and a unified market-reflective exchange rate by the central bank, have proven critical in stemming an economic downturn, but they have stoked inflation.



&#8220;The ultimate purpose here, of course, is jobs and opportunities,&#8221; Sienaert said.



(Reporting by Elisha Bala-Gbogbo; Editing by Angus MacSwan)

FILE PHOTO: People shop at a fresh food market in Oyingbo, Lagos

Nigeria seeing positive results from fiscal reforms, World Bank says

The world’s ‘most advanced’ humanoid robot

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="575" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/EWIHZR63PZN5DEGVL2QOXJBLFM-820x575.jpg" alt="" class="wp-image-543284" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/EWIHZR63PZN5DEGVL2QOXJBLFM-820x575.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/EWIHZR63PZN5DEGVL2QOXJBLFM-300x211.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/EWIHZR63PZN5DEGVL2QOXJBLFM-128x90.jpg 128w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/EWIHZR63PZN5DEGVL2QOXJBLFM-768x539.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/EWIHZR63PZN5DEGVL2QOXJBLFM-1536x1078.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/EWIHZR63PZN5DEGVL2QOXJBLFM-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Cars are seen on display at a showroom of a Nissan dealership in Melrose, South Africa, July 16, 2024. REUTERS/Siphiwe Sibeko/File Photo</figcaption></figure>



JOHANNESBURG, Oct 17 (Reuters)&nbsp;&#8211;&nbsp;South Africa is considering introducing tax rebates or subsidies for consumers to boost buying of electric vehicles, President Cyril Ramaphosa said on Thursday, as Africa&#8217;s most industrialised economy transitions its automotive industry.



Global automakers like Ford, Volkswagen, BMW and Toyota manufacture models in South Africa for both the local and European markets. Britain and the European Union jointly consume 46% of the vehicles the country produces.



The move towards cleaner and more sustainable fuels, plus stringent regulation in key markets, is putting pressure on some global automakers to shift towards electric and hybrid models, Ramaphosa said at an automotive industry conference.



As a result, South Africa&#8217;s automotive industry is positioning itself to take advantage of the demand for new energy vehicles.



&#8220;Consideration must be given to incentives for manufacturers, as well as tax rebates or subsidies for consumers, to accelerate the uptake of electric vehicles,&#8221; Ramaphosa said.



To encourage the production of electric cars in South Africa, the government will introduce an allowance for new investments from March 1, 2026, Finance Minister Enoch Godongwana said in February in his budget.



This will allow producers to claim 150% of qualifying investment spending on electric and hydrogen-powered vehicles in the first year.



Ramaphosa added that the government is working to finalise comprehensive policy guidelines on so-called new energy vehicles &#8220;that do not exclude alternative technologies such as hybrids and plug-in hybrids&#8221;.



Last year, the minister for trade, industry and competition published a white paper outlining steps to support the transition such as government incentives and a temporary reduction on import duties for batteries in vehicles produced and sold in the domestic market.



The paper also advocated the production of batteries for battery electric vehicles in South Africa and the development of value chains in the green hydrogen fuel cell market.



&#8220;We are committed to working hand-in-hand with the private sector to promote the production of new energy vehicles and the development of the necessary infrastructure to support them,&#8221; Ramaphosa said.



($1 = 17.7422 rand)



(Reporting by Nqobile Dludla; Editing by Jan Harvey)

Cars are seen on display at a showroom, in Melrose

South Africa mulls tax rebates, subsidies to boost local EV industry

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108048848-1729142200339-gettyimages-2170767629-GERMANY_ECB-820x461.jpeg" alt="" class="wp-image-543281" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108048848-1729142200339-gettyimages-2170767629-GERMANY_ECB-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108048848-1729142200339-gettyimages-2170767629-GERMANY_ECB-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108048848-1729142200339-gettyimages-2170767629-GERMANY_ECB-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108048848-1729142200339-gettyimages-2170767629-GERMANY_ECB-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108048848-1729142200339-gettyimages-2170767629-GERMANY_ECB-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108048848-1729142200339-gettyimages-2170767629-GERMANY_ECB.jpeg 1858w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Christine Lagarde, president of the European Central Bank (ECB), left, and Wolfgang Proissl, director of general communications at the European Central Bank (ECB), at a rates decision news conference in Frankfurt, Germany, on Thursday, Sept. 12, 2024.  Bloomberg | Bloomberg | Getty Images</figcaption></figure>



The European Central Bank is widely expected to announce its third interest rate cut of the year at its Thursday meeting, after policymakers flagged reduced inflation risks and a weakening growth outlook.



Headline price rises in the euro area eased to 1.8% in September, coming in below the central bank’s 2% target for the first time in three years.



A cut on Thursday would see the ECB reducing rates at consecutive meetings for the first time since December 2011.



Expectations for a faster pace of monetary easing have built since the ECB’s Sept. 12 meeting, when market pricing suggested just one more rate cut this year, rather than the two priced in as of Thursday morning.



Along with the latest inflation print on Oct. 1, that shift in sentiment has come amid dovish comments from various ECB members. ECB President Christine Lagarde also swayed markets, when she said the latest data readings “strengthen our confidence that inflation will return to target in a timely manner.”



Another key factor is the euro zone growth outlook. The ECB trimmed its euro zone growth forecast for 2024 last month on the back of weaker domestic demand, now projecting an 0.8% GDP rise, compared with 0.9% previously. Some of its biggest economies continue to face major challenges, including manufacturing weakness in Germany and a huge fiscal consolidation project looming in France; while sentiment indicators remain weak.

108048848-1729142200339-gettyimages-2170767629-GERMANY_ECB

European Central Bank set for first back-to-back interest rate cut in 13 years

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="600" height="600" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/Philip-Myburgh_-Group-Head-of-Trade-at-Standard-Bank-Business-and-Commercial-Banking.jpg" alt="" class="wp-image-543264" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/Philip-Myburgh_-Group-Head-of-Trade-at-Standard-Bank-Business-and-Commercial-Banking.jpg 600w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/Philip-Myburgh_-Group-Head-of-Trade-at-Standard-Bank-Business-and-Commercial-Banking-300x300.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/Philip-Myburgh_-Group-Head-of-Trade-at-Standard-Bank-Business-and-Commercial-Banking-90x90.jpg 90w" sizes="auto, (max-width: 600px) 100vw, 600px" /><figcaption class="wp-element-caption">Philip Myburgh, Group Head of Trade at Standard Bank Business and Commercial Banking.</figcaption></figure>



Johannesburg, South Africa, 17 October 2024&nbsp;– Tanzania is now ranked 4th highest in terms of overall attractiveness for trade in Africa. Its leap in the rankings was boosted by the country’s substantial investments in infrastructure and better access to finance, enabling businesses to engage more actively in cross-border trade.



On the downside, Ghana experienced a sharp decline, moving from the 3rd position to the 7th spot, underscoring the pressures that economy continues to endure. Its sharp decline also raises concerns about its ability to maintain trade competitiveness, even as Ghana is one of the most stable and democratic countries in West Africa. Its decline in the trade rankings is mainly due to a worsening macroeconomic environment and falling trade confidence. As economic volatility intensified in Ghana, its ability to facilitate seamless trade came under strain, making it harder for businesses to access foreign currency, most notably USD, that is required to pay for imports and thus engage in cross-border activities especially for Small and Medium-sized Enterprises, which this barometer favours.



These are some of the key insights stemming from Issue 4 of the Standard Bank Africa Trade Barometer (SB ATB), launched today (<a href="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/SBG-Africa-Trade-Barometer-2024_Consolidated-Report_Final_Published-161024-1.pdf">SBG Africa Trade Barometer 2024_Consolidated Report_Final_Published 161024</a>).



“As Africa moves towards greater integration under the African Continental Free Trade Area (AfCFTA), the Standard Bank Africa Trade Barometer offers critical insights into the opportunities and challenges faced by African businesses and stakeholders in facilitating trade. The shifts detailed in the report further reflect changing macroeconomic conditions, infrastructure challenges and access to finance amongst many others, which are all impacting the trade environments of the 10 countries featured”, says Philip Myburgh, Group Head of Trade at Standard Bank Business and Commercial Banking.



The SB ATB covers seven broad thematic categories of data that impact on Africa’s trade, and upon which the barometer scores each country. These categories are; trade openness, access to finance, macroeconomic stability, infrastructure, foreign trade, governance &amp; economy, as well as traders’ financial behaviour. The SB ATB serves as Africa’s leading trade index, with the intent of addressing the information vacuum of reliable African trade data that can support and enable the growth of intra-Africa trade.



Overall, the SB ATB trade attractiveness rankings reveal a dynamic shift in trade standings among the 10 African nations it covers, with Tanzania (moving from 8th to 4th ranking), Mozambique (4 to 3), Nigeria (6 to 5) and Zambia (9 to 8) recording improvements in their positions, while declines were recorded for Ghana (3 to 7), Uganda (7 to 9) and Kenya (5 to 6). Meanwhile South Africa, Namibia and Angola retained their rankings, at positions 1, 2 and 10, respectively.



The 10 countries covered by the SB ATB are AfCFTA signatory nations, represent 66% of Africa’s gross domestic product (GDP) and 45% of the continent’s population.



Overall, the macroeconomic conditions across the countries present a mixed outlook, with relatively sustained growth tempered by ongoing challenges. The estimated real GDP growth rate for 2025 stands at 4.3%, reflecting steady progress despite headwinds. Positive developments include infrastructure investments, economic diversification efforts, and increased production in sectors like oil, mining, and agriculture. However, high inflation, forecasted to reach 9.9% in 2024, remains a pressing concern, driven by currency depreciation and worsened by weather events such as severe droughts in Southern Africa and flooding in East Africa.



Amid these complex dynamics, it is evident that the path forward will require a focus on prudent economic management, diversified growth strategies, and bolstering resilience against climate risks.



As a trusted partner for the growth of the businesses that continue to power Africa’s dynamic economies, this Issue 4 of the SB ATB report serves as a tool for businesses to make strategic decisions that foster sustainable trade and economic development across the continent.



“Given our position as Africa’s largest bank, we understand that reliable trade data is essential for making informed business decisions, particularly in the context of a dynamic and evolving trade environment. This Issue 4 of the Standard Bank Africa Trade Barometer provides businesses, governments and investors, with the insights they need to navigate challenges and seize new opportunities on the continent”, advanced Myburgh.

Philip Myburgh_ Group Head of Trade at Standard Bank Business and Commercial Banking

Standard Bank Africa Trade Barometer: Tanzania leaps ahead in trade attractiveness rankings, while Ghana exits top 3

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="429" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HCVRNAVJRJMOJBUK4XOB7PEJGY-820x429.jpg" alt="" class="wp-image-506011" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HCVRNAVJRJMOJBUK4XOB7PEJGY-820x429.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HCVRNAVJRJMOJBUK4XOB7PEJGY-300x157.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HCVRNAVJRJMOJBUK4XOB7PEJGY-160x84.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HCVRNAVJRJMOJBUK4XOB7PEJGY-768x402.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HCVRNAVJRJMOJBUK4XOB7PEJGY.jpg 1200w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A teller serves a client with Kenya shilling notes at the cashier&#8217;s booth of a forex exchange bureau in Kenya&#8217;s capital Nairobi, April 20, 2016. REUTERS/Thomas Mukoya/File Photo</figcaption></figure>



NAIROBI, Oct 17 (Reuters) &#8211; The Kenyan shilling was steady against the dollar on Thursday as diaspora dollar inflows matched importer demand, one trader said.



The shilling traded at 128.50/129.50 against the dollar at 0715 GMT, according to LSEG data, the same as Wednesday&#8217;s closing rate.



&#8220;We don&#8217;t expect much movement ahead of the weekend,&#8221; the trader said.



(Reporting by Sonia Rao; Editing by George Obulutsa)

HCVRNAVJRJMOJBUK4XOB7PEJGY

Kenyan shilling steady; diaspora FX inflows match importer demand

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="537" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/09/AJ75STV5GFI2VAY6ECK3RA5YKM-820x537.jpg" alt="" class="wp-image-536666" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/09/AJ75STV5GFI2VAY6ECK3RA5YKM-820x537.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/AJ75STV5GFI2VAY6ECK3RA5YKM-300x196.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/AJ75STV5GFI2VAY6ECK3RA5YKM-138x90.jpg 138w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/AJ75STV5GFI2VAY6ECK3RA5YKM-768x503.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/AJ75STV5GFI2VAY6ECK3RA5YKM-1536x1005.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/AJ75STV5GFI2VAY6ECK3RA5YKM-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">South African Rand coins are seen in this photo illustration taken September 9, 2015. REUTERS/Mike Hutchings</figcaption></figure>



JOHANNESBURG, Oct 17 (Reuters)&nbsp;&#8211;&nbsp;South Africa&#8217;s rand weakened in early trade on Thursday, ahead of U.S. retail sales figures that could give cues on the Federal Reserve&#8217;s interest rate path this year.



At 0651 GMT, the rand traded at 17.6850 against the U.S. dollar, about 0.2% weaker than its previous close.



The dollar last traded about 0.07% firmer against a basket of currencies.



U.S. retail sales figures for September and an interest rate announcement by the European Central Bank are due later in the day.



&#8220;This will be an important data set that will offer insight into consumptive demand and whether it has softened enough to warrant the Fed&#8217;s stance,&#8221; said ETM Analytics in a research note, referring to the U.S. data.



&#8220;Should the U.S. data soften more than expected, the USD may slip back from what has been an extraordinary run,&#8221; the note added.



Like other risk-sensitive currencies, the rand often takes direction from global drivers like U.S. economic data and monetary policy.



With a light domestic calendar, the rand is likely to trade on dollar movements.



South Africa&#8217;s central bank governor Lesetja Kganyago will deliver a special lecture at the University of Stellenbosch and President Cyril Ramaphosa will answer lawmakers&#8217; questions in parliament.



South Africa&#8217;s benchmark 2030 government bond was weaker in early deals, with the yield up 5.5 basis points to 9.285%.



(Reporting by Tannur Anders; Editing by Sumana Nandy)

South African Rand coins are seen in this photo illustration

South African rand slips ahead of US retail data

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="612" height="408" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/istockphoto-1076949610-612x612-1-2.jpg" alt="" class="wp-image-524623" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/istockphoto-1076949610-612x612-1-2.jpg 612w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/istockphoto-1076949610-612x612-1-2-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/istockphoto-1076949610-612x612-1-2-135x90.jpg 135w" sizes="auto, (max-width: 612px) 100vw, 612px" /></figure>



JOHANNESBURG, Oct 17 (Reuters)&nbsp;&#8211;&nbsp;The following political event, equity and currency market moves may affect South African markets on Thursday.



<h2 class="wp-block-heading" id="h-political-event">POLITICAL EVENT</h2>



South African President Cyril Ramaphosa to answer lawmakers&#8217; questions in parliament.



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



South Africa&#8217;s rand held onto its gains on Wednesday, as domestic retail sales rose in August, indicating an improvement in consumer sentiment.



On the stock market, the Top-40 index closed 0.62% higher.



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



Asian shares gave back early gains on Thursday as a housing policy briefing in China underwhelmed investors, while the dollar stood near 2-1/2 month highs on the prospect of a Donald Trump presidency.



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



The Dow Jones Industrial Average rose on Wednesday and closed at a record high, and Wall Street&#8217;s two other benchmark indexes also ended higher, weathering declines in megacap tech shares thanks to small-caps gains and financial shares buoyed by strong earnings.



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



Gold rose on Thursday to hover near record levels, underpinned by uncertainty surrounding the U.S. election and expectations of more rate cuts by major central banks, while investors looked forward to a slew of U.S. data for further direction.



&#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; Medicines regulator urges Treasury to step up its funding



&#8211; Presidency upbeat on hitting 3% growth by 2025 with stable GNU



&#8211; SA carmakers call for hybrid-car production incentives



(Compiled by Tannur Anders)

istockphoto-1076949610-612×612-1

South African Markets – Factors to watch on Oct 17

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="553" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/DWCQX6GFJ5OCXGS5Z5ENXFGNQI-820x553.jpg" alt="" class="wp-image-543225" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/DWCQX6GFJ5OCXGS5Z5ENXFGNQI-820x553.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/DWCQX6GFJ5OCXGS5Z5ENXFGNQI-300x202.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/DWCQX6GFJ5OCXGS5Z5ENXFGNQI-133x90.jpg 133w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/DWCQX6GFJ5OCXGS5Z5ENXFGNQI-768x518.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/DWCQX6GFJ5OCXGS5Z5ENXFGNQI-1536x1037.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/DWCQX6GFJ5OCXGS5Z5ENXFGNQI-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Kenya&#8217;s Deputy President Rigathi Gachagua speaks during a press conference, ahead of lawmakers&#8217; vote over his impeachment motion at his residence in Karen, Nairobi Kenya, October 7, 2024. REUTERS/Monicah Mwangi/File Photo</figcaption></figure>



NAIROBI, Oct 17 (Reuters)&nbsp;&#8211;&nbsp;Kenya&#8217;s Senate opened a second day of hearings on Thursday ahead of a vote on whether to remove Deputy President Rigathi Gachagua from office over charges he embezzled public funds, stirred ethnic hatred and undermined the government, which he denies.



The National Assembly voted last week to impeach Gachagua, who helped President William Ruto win an election two years ago but has been assailed by allies of the president over alleged disloyalty and a series of provocative public comments.



Ruto has not commented on the impeachment process, while Gachagua has called it a political lynching based on falsehoods.



If two-thirds of senators back the motion in a vote scheduled for Thursday evening, Gachagua will become the first Kenyan president or deputy president forced from office by impeachment, a process introduced under the 2010 constitution.



The second day of hearings is scheduled to include hours of testimony by Gachagua, who will respond to a litany of accusations laid out on Wednesday by a lawmaker from Ruto&#8217;s coalition.



The lawmaker, Mwengi Mutuse, said Gachagua had incited hatred in comments about ethnic minorities from his home region.



Mutuse also accused Gachagua of acquiring properties worth over $40 million since becoming deputy president, despite reporting a net worth before entering office of only around $6 million.



In response, Gachagua&#8217;s lawyer, Elisha Ongoya, said the allegations lacked evidence and were based on speculation.



Kenyan courts have declined to block the proceedings as Gachagua requested but have said they could review the legality of the process once it is completed.



The impeachment follows a realignment of Kenyan politics following mass street protests in June and July that forced Ruto to withdraw proposed tax hikes and shake up his cabinet.



Ruto appointed several allies of the main opposition leader Raila Odinga as ministers, a move that was seen as weakening Gachagua&#8217;s influence.



(Reporting by George Obulutsa and Sonia Rao; Editing by Aaron Ross and Christina Fincher)

Kenya’s Deputy President Rigathi Gachagua speaks during a press conference, ahead of lawmakers’ vote over his impeachment motion at his residence in Karen, Nairobi

Kenya’s Senate to vote on removal of deputy president

<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, Oct 17 (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-events">EVENTS:</h2>



*Kenya&#8217;s Senate is due to vote on whether to remove Deputy President Rigathi Gachagua from office.



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



Asian shares gave back early gains on Thursday as a housing policy briefing in China underwhelmed investors, while the dollar stood near 2-1/2 month highs on the prospect of a Donald Trump presidency.



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



Oil prices rose in early Asian trade on Thursday, paring sharp losses over the past two sessions, after industry data showed an unexpected drop in U.S. crude stockpiles last week.



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



South Africa&#8217;s rand held onto its gains on Wednesday, as domestic retail sales rose in August, indicating an improvement in consumer sentiment.



<h2 class="wp-block-heading" id="h-nigeria-petroleum">NIGERIA PETROLEUM</h2>



Nigeria&#8217;s oil regulator has rejected Shell&#8217;s proposed $1.3 billion sale of its onshore oilfields to Renaissance group because the buyer is not qualified to manage the assets, Lagos-based ThisDay newspaper reported on Wednesday.



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



The Kenyan shilling was unmoved against the dollar on Wednesday, data from the London Stock Exchange Group showed.



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



Kenya is in discussions with the United Arab Emirates for a $1.5 billion commercial loan with an 8.25% interest rate and a seven-year tenor, Finance Minister John Mbadi said on Wednesday.



<h2 class="wp-block-heading" id="h-kenya-politics">KENYA POLITICS</h2>



Kenya&#8217;s senate began impeachment hearings against Kenya&#8217;s deputy president on Wednesday, hours after a court said the proceedings were constitutional, clearing the way for a vote on his dismissal this week.



<h2 class="wp-block-heading" id="h-ethiopia-telecoms">ETHIOPIA TELECOMS</h2>



State-owned Ethio Telecom has set a share price of 300 birr ($2.54) for the 100 million shares it plans to sell via the company&#8217;s mobile payment service prior to a stock market listing, the company&#8217;s CEO Frehiwot Tamiru said on Wednesday.



<h2 class="wp-block-heading" id="h-uganda-coffee">UGANDA COFFEE</h2>



The value of Uganda&#8217;s coffee exports surged 53.8% in September, compared to the same period a year ago, on the back of a rise in global prices, the state regulator said.



<h2 class="wp-block-heading" id="h-senegal-economy">SENEGAL ECONOMY</h2>



The International Monetary Fund on Wednesday said a staff team had visited Senegal to start assessing the implications of data revisions resulting from a government audit of past and current IMF-supported programs.



<h2 class="wp-block-heading" id="h-gabon-eurobonds">GABON EUROBONDS</h2>



Gabon&#8217;s Eurobonds were trading near their highest levels since April after a research note sparked optimism over the government&#8217;s commitment and ability to repay a maturity due next year, investors told Reuters.



<h2 class="wp-block-heading" id="h-mozambique-election">MOZAMBIQUE ELECTION</h2>



Mozambique&#8217;s ruling party Frelimo was leading provisional election results in all 11 provinces on Wednesday, while opposition parties cried fraud and one called for a strike.



((Compiled by Nairobi Newsroom))

World map with charts and graphs as symbols of global finance

African Markets – Factors to watch on Oct 17

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="572" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/XFNOXFRHRNJ3PLPFQZF66W3MBE-820x572.jpg" alt="" class="wp-image-506368" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/XFNOXFRHRNJ3PLPFQZF66W3MBE-820x572.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/XFNOXFRHRNJ3PLPFQZF66W3MBE-300x209.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/XFNOXFRHRNJ3PLPFQZF66W3MBE-129x90.jpg 129w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/XFNOXFRHRNJ3PLPFQZF66W3MBE-768x536.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/XFNOXFRHRNJ3PLPFQZF66W3MBE-1536x1071.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/XFNOXFRHRNJ3PLPFQZF66W3MBE.jpg 1822w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Kenya&#8217;s President William Ruto speaks at a press conference where he announced spending cuts in government after protests against Kenya&#8217;s proposed finance bill 2024/2025, in Nairobi, Kenya, July 5, 2024. REUTERS/Monicah Mwangi</figcaption></figure>



NAIROBI, Oct 16 (Reuters)&nbsp;&#8211;&nbsp;Kenya is in discussions with the United Arab Emirates for a $1.5 billion commercial loan with an 8.25% interest rate and a seven-year tenor, Finance Minister John Mbadi said on Wednesday.



The East African nation is seeking to diversify its sources of financing after deadly protests forced the government to abandon a slate of tax hikes and delayed disbursements from the International Monetary Fund (IMF). Reuters reported the prospective loan last month.



&#8220;This loan is cheaper than the Eurobond we borrowed at 10.7%,&#8221; Mbadi told a news conference, referring to a $1.5 billion dollar-denominated bond issued in February to partially buy back a portion of a maturing $2 billion Eurobond.



Kenya has satisfactorily answered the questions raised by the IMF around the country&#8217;s current lending programme, which was interrupted by the protests and the abandonment of the finance bill, Mbadi said. He will hold more meetings with the fund in Washington DC next week.



&#8220;After that, the funds will be disbursed,&#8221; Mbadi said.



The IMF&#8217;s executive board will meet on Oct. 30 to consider the staff review of Kenya&#8217;s programme, Bloomberg news agency reported, citing people familiar with the matter.



Asked about the report, the Fund said the date had not yet been set.



&#8220;No date has been confirmed yet for the Board&#8217;s deliberation. We will communicate the date and related information in due course,&#8221; it said.



Kenya would seek a new fund programme when the current one runs out next&nbsp;year, Mbadi said, but&nbsp;he called for more realistic fiscal targets to underpin future lending.



&#8220;I completely believe some of the targets we have set with the IMF were unrealistic,&#8221; he said, citing a target of lowering the fiscal deficit to 3.8% this financial year from 5.2% in the year that ended in June, which has since been removed.



<h2 class="wp-block-heading" id="h-risk-exposure">RISK EXPOSURE?</h2>



The government is also talking with the IMF after the lender raised some concerns about the potential commercial loan from the UAE, the minister said.



&#8220;There are issues to be discussed, including with the IMF, which had expressed some reservations, because we are talking about this being an external loan and is dollar-denominated, it may expose us to additional risk,&#8221; he said.



The government has countered that the loan was cheaper than the other options, including Eurobonds, Mbadi said.



&#8220;Those are issues that we are discussing. We haven&#8217;t firmed them up. We are looking for the transaction adviser on the same,&#8221; he said.



The government has set the foreign borrowing target for this financial year at 168 billion shillings ($1.31 billion), while the UAE loan if finalised would bring in the equivalent of 195 billion shillings, helping the government to cut local borrowing.



President William Ruto&#8217;s government has prioritised lowering elevated lending rates in the economy, Mbadi said, to support businesses and economic growth.



Policymakers cut the central bank&#8217;s benchmark lending rate by 75 basis points last week to 12%, but Mbadi said it should be at 10% or lower.



Under Ruto, who took over in September 2022, Kenya has forged closer ties with the UAE.



The UAE&#8217;s Abu Dhabi National Oil Company (ADNOC) and Emirates National Oil Company were among three Gulf firms Ruto&#8217;s government picked last year to supply Kenya with oil on longer credit terms, in a shift from an open tender system.



The UAE provided Ethiopia with $1 billion in 2018 to help with a severe hard currency cash crunch, and the central banks of both sides announced an $817 million swap line in July.



The UAE also signed a deal with Egypt earlier this year to develop a prime stretch of its Mediterranean coast that was expected to bring $35 billion of investments into the Egyptian economy.



($1 = 128.5000 Kenyan shillings)



(Reporting by Duncan Miriri; Editing by Angus MacSwan, Mark Potter and Gareth Jones)

Kenya’s President announces government spending cuts after protest against Kenya’s proposed finance bill 2024/2025, in Nairobi

Kenya in talks for a $1.5 bln commercial loan with UAE, finance minister says

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108048818-1729133179349-gettyimages-2061912118-20090101240309-99-276079-820x461.jpeg" alt="" class="wp-image-543173" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108048818-1729133179349-gettyimages-2061912118-20090101240309-99-276079-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108048818-1729133179349-gettyimages-2061912118-20090101240309-99-276079-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108048818-1729133179349-gettyimages-2061912118-20090101240309-99-276079-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108048818-1729133179349-gettyimages-2061912118-20090101240309-99-276079-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108048818-1729133179349-gettyimages-2061912118-20090101240309-99-276079-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108048818-1729133179349-gettyimages-2061912118-20090101240309-99-276079.jpeg 1858w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">09 March 2024, China, Peking: Ni Hong (r.), China’s Minister of Housing and Rural Development, speaks at a press conference.  Johannes Neudecker | Picture Alliance | Getty Images</figcaption></figure>



China will expand its “whitelist” of real estate projects and speed up bank lending for these unfinished developments to 4 trillion yuan ($561.8 billion) by the end of the year, the country’s housing ministry said Thursday.



Ni Hong, China’s minister of housing and urban-rural development, made the announcement at a press conference, alongside officials from the central bank, finance ministry and the National Financial Regulatory Administration.



A total of 2.23 trillion yuan had already been approved in loans to whitelisted developers. That figure will almost double to 4 trillion yuan by the end of 2024, according to a senior official from the financial regulatory administration.



Launched in January, China’s “whitelist” initiative allows city governments to recommend residential projects to banks for speedier lending. The intent was to ensure the completion of unfinished housing projects so they could finally be delivered to buyers.



All commercial housing projects are now eligible for the “whitelist” project, Xiao Yuanqi, vice minister of the administration said Thursday. The move is expected to broaden the list.



Xiao also stressed that banks should deploy funds “as soon as possible,” saying they could release the loans in full to developers rather than in tranches, according to CNBC’s translation of the Chinese.



The briefing was the latest in a series of high-level government policy announcements aimed at bolstering the economy.



In late September, Pan Gongsheng, the People Bank of China governor announced a 50 basis-point cut to the amount of cash banks need to have on hand, known as the reserve requirement ratio or RRR. He also lowered the minimum down payment for second-home loans nationwide from 25 percent to 15 percent.



Days later, officials in a top-level meeting, chaired by Chinese president Xi Jinping, pledged to “halt the real estate market decline and spur a stable recovery.”



<h3 class="wp-block-heading" id="h-disappointing-briefing">Disappointing briefing?</h3>



The officials on Thursday’s briefing appeared to be mostly “fine-tuning existing policies,” Bruce Pang, chief economist and head of research of Greater China at JLL, said. “It will take time for the improvement on sales volumes and prices to be translated into property investment and construction.”&nbsp;



Some investors saw the recent flurry of activity as a sign that Beijing was finally ready to take drastic measures to stimulate growth, and they had hoped for more stimulus measures from the briefing. As Xiao was speaking, Chinese CSI 300 real estate index dropped over 5%, in a sharp turnaround from gains of around 8.7% in the previous three trading sessions.



Volatility in the Chinese stock market is likely to continue as investors “lack conviction that the stimulus package and what’s been announced is going to turn around things,” said Chi Lo, senior economist at BNP Paribas Asset Management.



Over the weekend, officials from China’s Ministry of Finance announced that they would allow local governments to issue more special bonds for land purchases and allow affordable housing subsidies to be used for existing housing inventory, instead of only new construction.



Chinese property stocks soared on Monday off the news, with the Hang Seng Mainland Properties Index rising over 2%. Real estate was also the leading gainer in Mainland China’s CSI 300, advancing by nearly 5%.



From its peak in 2020, the HSMPI has lost more than 80%. In May, Ni told reporters at a press conference that developers “that must go bankrupt, should go bankrupt, or be restructured.”



<h3 class="wp-block-heading">Real estate slump</h3>



More than 50 cities across China have introduced policies to boost the real estate market, according to state media, citing the housing ministry.



Ahead of the Golden Week holiday, the city of Guangzhou announced it will remove all&nbsp;restrictions on home purchases. Meanwhile the governments of Beijing, Shanghai, Shenzhen moved to ease homebuying restrictions by non-local buyers and lowered the minimum down-payment ratios.



The slew of measures came after China’s previous measures had led to little meaningful rebounds. New home prices in August dropped at the fastest pace in more than nine years, according to the National Bureau of Statistics data.



The value of new homes sold fell by 23.6% for the year through August, slightly better than the 24.3% drop year-to-date as of July. Average home prices fell by 6.8% in August from the prior month on a seasonally adjusted basis, according to Goldman Sachs.



The real estate sector — once accounted for more than a quarter of China’s economy — had been in a painful downturn since 2021, when Beijing launched a crackdown on the sector’s high debt levels, sending a slew of developers to default on their debts and leave many housing projects unfinished. That had severely dampened homebuyers confidence in the market.



— CNBC’s Evelyn Cheng contributed to this story.

108048818-1729133179349-gettyimages-2061912118-20090101240309-99-276079

China pledges more financial support for ‘whitelist’ real estate projects

Meet the ‘world’s most advanced’ humanoid robot

Why The Rich Keep Getting Richer In The U.S.

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="604" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/YDJE2WKUFZKPZBHQDZIBXPBFEA-820x604.jpg" alt="" class="wp-image-542944" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/YDJE2WKUFZKPZBHQDZIBXPBFEA-820x604.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/YDJE2WKUFZKPZBHQDZIBXPBFEA-300x221.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/YDJE2WKUFZKPZBHQDZIBXPBFEA-122x90.jpg 122w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/YDJE2WKUFZKPZBHQDZIBXPBFEA-768x566.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/YDJE2WKUFZKPZBHQDZIBXPBFEA-1536x1131.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/YDJE2WKUFZKPZBHQDZIBXPBFEA-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Daniel Chapo, presidential candidate of the ruling Frelimo party casts his vote during the general elections at Inhambane, in the southern Mozambique, October 9, 2024. REUTERS/Siphiwe Sibeko/File Photo</figcaption></figure>



MAPUTO, Oct 16 (Reuters)&nbsp;&#8211;&nbsp;Mozambique&#8217;s ruling party Frelimo was leading provisional election results in all 11 provinces on Wednesday, while opposition parties cried fraud and one called for a strike.



Frelimo&#8217;s presidential candidate Daniel Chapo was widely expected to win the Oct. 9 election. The party has governed Mozambique since 1975 and has been consistently accused of rigging elections, which it denies.



Full results are expected on Oct. 24.



Independent candidate Venancio Mondlane, seen as Chapo&#8217;s biggest challenger, said he was in the lead according to his own tally and called for a nationwide strike on Monday, Oct. 21.



&#8220;They (Frelimo) are not going to hand over power to anyone. They want to continue to control power, finance, business, oil, gas, diamonds, rubies,&#8221; Mondlane said in a video broadcast on his social media pages.



&#8220;To show that the people are actually ruling, we will paralyse all activity on Monday,&#8221; he said.



Presidential candidate Lutero Simango of the Democratic Movement of Mozambique, a small opposition party, said that he would challenge the results in court.



A Frelimo spokesperson did not immediately reply to a request for comment. In public remarks on Friday, Chapo called for people to remain calm while awaiting official results.



Election observers said the poll did not meet international standards for democratic elections. The International Republican Institute, a U.S.-based monitoring group, reported vote buying, intimidation, inflated voter rolls in Frelimo strongholds, limited transparency in result collation, and other issues.



&#8220;Once again, as a country, we held elections that&#8230; do not reflect, at least from what we have been observing, the will of the voters,&#8221; said Edson Cortez, director of the Centre for Public Integrity (CIP), a Mozambican NGO.



A spokesperson for the electoral commission declined to comment on those allegations.



Videos circulating on social media showed street protests in the northern city of Nampula on Wednesday. Reuters was not immediately able to verify the videos.



Mozambique police have opened fire on political protesters in the past, including after last year&#8217;s local elections, according to human rights groups.



(Reporting by Manuel Mucari, Additional reporting and writing by Nellie Peyton; Editing by William Maclean)

FILE PHOTO: Frelimo candidate Daniel Chapo casts his vote

Mozambique ruling party leads early election results as opposition cries foul

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="234" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/blog2099x600mcm-gfsr-3artificial-intelligence-can-make-markets-more-efficientclewistsepuilungistock-820x234.jpg" alt="" class="wp-image-542926" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/blog2099x600mcm-gfsr-3artificial-intelligence-can-make-markets-more-efficientclewistsepuilungistock-820x234.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/blog2099x600mcm-gfsr-3artificial-intelligence-can-make-markets-more-efficientclewistsepuilungistock-300x86.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/blog2099x600mcm-gfsr-3artificial-intelligence-can-make-markets-more-efficientclewistsepuilungistock-160x46.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/blog2099x600mcm-gfsr-3artificial-intelligence-can-make-markets-more-efficientclewistsepuilungistock-768x220.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/blog2099x600mcm-gfsr-3artificial-intelligence-can-make-markets-more-efficientclewistsepuilungistock-1536x439.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/blog2099x600mcm-gfsr-3artificial-intelligence-can-make-markets-more-efficientclewistsepuilungistock-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Credit: Lewis Tse Pui Lung/iStock by Getty Images</figcaption></figure>



More efficient or more volatile? The adoption of the latest iterations of artificial intelligence by financial markets can improve risk management and deepen liquidity; but it could also make markets opaque, harder to monitor, and more vulnerable to cyber-attacks and manipulation risks.



The new&nbsp;<a href="https://www.imf.org/en/Publications/GFSR/Issues/2024/10/22/global-financial-stability-report-october-2024?cid=bl-com-AM2024-GFSREA2024002&amp;utm_medium=email&amp;utm_source=govdelivery" target="_blank" rel="noreferrer noopener">Global Financial Stability Report</a>&nbsp;looks at new market data to understand where this technology might be taking us. IMF staff conducted extensive outreach across various stakeholders—from investors to technology providers to market regulators—to show how financial institutions are harnessing advances in AI for capital market activities, and the potential impact of its adoption.



Hedge funds, investment banks, and others have been using quantitative trading strategies for decades. Automated trading algorithms have helped markets move faster and digest large trades more efficiently in major asset classes such as US equities. But they have also contributed to “flash crash” events when market prices have swung wildly in very short periods of time—such as in May 2010 when US stock prices collapsed only to rebound minutes later—and there are fears they could destabilize markets in times of severe stress and uncertainty.



Artificial intelligence, through its ability to almost instantly process large amounts of data and even text for use by traders, is poised to take these kinds of changes to another level. However, while generative AI and other recent breakthroughs are attracting attention in both the popular press and in financial markets, today they are used in only limited ways by actual investors. So, if we are only at the beginning of an AI-led transformation, where might we be headed?



Patent filings are a good way to understand this, given what is often a long lead time between filings and actual production-ready technology. Since large language models, or LLMs, started to appear in 2017, the share of AI content in patent applications related to algorithmic trading has risen from 19 percent in 2017 to over 50 percent each year since 2020, suggesting a wave of innovation is coming in this area.



<figure class="wp-block-image"><a href="https://www.imf.org/en/Blogs/Articles/2024/10/15/artificial-intelligence-can-make-markets-more-efficient-and-more-volatile?utm_medium=email&amp;utm_source=govdelivery" target="_blank" rel="noreferrer noopener"><img decoding="async" src="https://content.govdelivery.com/attachments/fancy_images/USIMF/2024/10/10339712/gfsr-chart-1_original.png" alt="chart showing exchange-traded funds annual portfolio turnover ratio"/></a></figure>



These new innovations will likely further AI&#8217;s ability to quickly rebalance investment portfolios,&nbsp;<a>which will in turn lead to higher trading volumes.&nbsp;</a>Market participants we surveyed concur that high-frequency, AI-driven trading is expected to become more prevalent, particularly in liquid asset classes like equities, government bonds, and listed derivatives. They foresee greater integration of sophisticated AI in investment and trading decisions within three to five years, although a “human in the loop” approach is expected to persist, especially for large capital allocation decisions.



Evidence of these changes is already being seen in the exchange-traded fund market. Although currently small, AI-driven ETFs show a significantly higher turnover compared to other ETFs. While a typical actively managed equity ETF turns over its holdings much less than once a year, AI-driven ETFs do so about once a month. If widespread, such strategies may in the future mean deeper, more liquid markets which are good for investors. But they could also contribute to market instability: several AI-driven ETFs saw increased turnover during the March 2020 market turmoil, suggesting the potential for increased herd-like selling during times of stress.



<figure class="wp-block-image"><a href="https://www.imf.org/en/Blogs/Articles/2024/10/15/artificial-intelligence-can-make-markets-more-efficient-and-more-volatile?utm_medium=email&amp;utm_source=govdelivery" target="_blank" rel="noreferrer noopener"><img decoding="async" src="https://content.govdelivery.com/attachments/fancy_images/USIMF/2024/10/10339699/gfsr-chart-2_original.png" alt="chart showing exchange-traded funds annual portfolio turnover ratio, with AI-driven ETFs driving higher volumes"/></a></figure>



Prices may react much more quickly in an AI-driven market. Investors mentioned the release of the complex and lengthy minutes of Federal Reserve meetings as an example where AI could provide a trading signal faster than any human trader could, and this may already be happening. Since 2017 and the introduction of LLMs, the movement of US equity prices 15 seconds after the release of the Fed minutes seem to be more consistently in the direction of the longer-lasting movement seen after 15 minutes, in contrast to the apparently uncorrelated movements in the pre-LLM period.



Who will be able to take advantage of these new technologies? AI might lead to a further migration of investment to hedge funds, proprietary trading firms, and other nonbank financial intermediaries, which would make markets less transparent and harder to monitor. Nonbanks have a structural advantage in the adoption of AI. They are generally more agile and subject to fewer regulatory constraints than large commercial and investment banks, which often must deal with legacy infrastructure and may be subject to more stringent requirements, including ensuring the explainability of complex AI models.



Policy recommendations



How should regulators and supervisors prepare for this new world? In a faster reacting market where nonbanks may continue to rise in importance, various aspects of regulation and supervision in AI-related areas should be enhanced.



Financial sector authorities and trading venues should determine if they need to design new volatility response mechanisms—or modify the existing ones appropriately—to respond to “flash crash” events potentially originated in AI-driven-trading. These include margin requirements, circuit breakers, and the resilience of central counterparties.



Similarly, financial sector authorities should continue to strengthen oversight and regulation of nonbank financial intermediaries by requiring them to identify themselves and disclose AI-relevant information; as well as require financial institutions to regularly map interdependencies between data, models, and technological infrastructure supporting AI models.



A close monitoring and oversight of this rapidly changing market lays the foundation for an opportune and balanced regulatory response that may allow financial sector participants to benefit from AI while mitigating its risks.

blog2099x600mcm-gfsr-3artificial-intelligence-can-make-markets-more-efficientclewistsepuilungistock

Artificial Intelligence Can Make Markets More Efficient—and More Volatile

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2048" height="1153" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/3057e15f-ef0f-4cc7-94c7-cb564bae4534-scaled.jpg" alt="" class="wp-image-542892" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/3057e15f-ef0f-4cc7-94c7-cb564bae4534-scaled.jpg 2048w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/3057e15f-ef0f-4cc7-94c7-cb564bae4534-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/3057e15f-ef0f-4cc7-94c7-cb564bae4534-820x462.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/3057e15f-ef0f-4cc7-94c7-cb564bae4534-160x90.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/3057e15f-ef0f-4cc7-94c7-cb564bae4534-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/3057e15f-ef0f-4cc7-94c7-cb564bae4534-1536x865.jpg 1536w" sizes="auto, (max-width: 2048px) 100vw, 2048px" /></figure>



Glen Steward, Founder and Chairman, Stewards Investment Capital, has helpful advice for investors seeking to enhance their portfolios.



In today’s rapidly evolving financial landscape, diversification remains fundamental to any robust investment strategy. For investors seeking to enhance their portfolios with new opportunities, emerging asset classes offer a unique blend of potential returns and risk mitigation. Here are four key areas that can bring significant value to your investment portfolio, especially when approached with the right strategy and partners.



<h2 class="wp-block-heading" id="h-investment-in-real-estate-market">Investment in Real Estate Market</h2>



The real estate market has long been a pillar of wealth accumulation, but its dynamics are shifting. In Africa, urbanization and economic growth are driving demand for residential and commercial properties. Emerging markets like South Africa offer opportunities, particularly in urban centers where property values are on the rise. In the United States (U.S.), regions such as Florida are experiencing a surge in real estate investments, whether commercial or residential and this is highly due to favorable economic conditions and population growth. The key to success in this sector lies in identifying high-growth areas and partnering with knowledgeable local experts who can navigate the complexities of these markets.



<h2 class="wp-block-heading" id="h-a-closer-look-at-the-private-credit-market">A Closer Look at the Private Credit Market</h2>



Private credit is another asset class that has been gaining traction globally. Whether in Africa or the U.S., the private credit market is booming. Since 2020, the U.S. private credit market has grown from $875 billion to $1.4 trillion in 2023, with projections to reach $2.3 trillion by 2027. This growth is driven by institutional and private investors seeking diversification, attractive yields, and risk mitigation. Private credit presents a compelling opportunity for several reasons: it aligns with growing market trends, provides protection against currency fluctuations with yields in USD, and offers low correlation with traditional assets, enhancing portfolio stability. Moreover, private credit supports small and medium-sized enterprises (SMEs) that are often underserved by traditional banks, fostering economic growth and offering investors a steady income stream with built-in risk mitigation mechanisms.



<h2 class="wp-block-heading" id="h-impact-investing-with-emerging-market-investments">Impact Investing with Emerging Market Investments</h2>



Impact investing in infrastructure and telecom towers in Africa is increasingly vital as it addresses both economic and social needs. The growing demand for telecom towers is driven by the expansion of telecommunication access, especially in rural areas where connectivity has traditionally been limited. This expansion is bridging the digital divide, offering opportunities for social upliftment and economic growth. Strategic impact investments in telecom infrastructure enable the deployment of innovative solutions like Power as a Service (PaaS) and 5G-ready sites, which are key in meeting future demands. This makes telecom towers an appealing option for investors seeking both financial returns and the chance to make a significant positive impact.



<h2 class="wp-block-heading" id="h-the-importance-of-digital-assets-in-a-diversified-portfolio">The Importance of Digital Assets in a Diversified Portfolio</h2>



In today’s evolving financial landscape, digital assets are becoming essential for a diversified portfolio. These assets offer unique growth potential and act as a hedge against traditional market volatility. As the global economy increasingly embraces digital technologies, early investment in digital assets can yield significant returns. Additionally, they provide liquidity and access to global markets, enhancing your portfolio&#8217;s resilience. By including a portion of your portfolio in digital assets, you align with the future of finance and ensure your investment strategy is positioned for long-term success but you need the right experienced partners to guide you in this process.



<h2 class="wp-block-heading" id="h-stewards-of-your-fortune-and-legacy">Stewards of Your Fortune and Legacy</h2>



At Steward Investment Capital, we are committed to guiding our clients through the complexities of emerging asset classes. Our tailored investment solutions are designed to maximize returns while managing risk, ensuring that your wealth is preserved and grows for future generations. As Stewards of your fortune, our mission is to build and protect your legacy with the utmost care and expertise.

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Nigeria seeing positive results from fiscal reforms, World Bank says

The world’s ‘most advanced’ humanoid robot

South Africa mulls tax rebates, subsidies to boost local EV industry

European Central Bank set for first back-to-back interest rate cut in 13 years

Standard Bank Africa Trade Barometer: Tanzania leaps ahead in trade attractiveness rankings, while Ghana exits top 3

Kenyan shilling steady; diaspora FX inflows match importer demand

South African rand slips ahead of US retail data

South African Markets – Factors to watch on Oct 17

Kenya’s Senate to vote on removal of deputy president

African Markets – Factors to watch on Oct 17

Kenya in talks for a $1.5 bln commercial loan with UAE, finance minister says

China pledges more financial support for ‘whitelist’ real estate projects

Meet the ‘world’s most advanced’ humanoid robot

Why The Rich Keep Getting Richer In The U.S.

Mozambique ruling party leads early election results as opposition cries foul

Artificial Intelligence Can Make Markets More Efficient—and More Volatile

Stewards Of Your Fortune: Emerging Asset Classes For Astute Investors

News Tips

Advertise With Us

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