Weekly Investor Update (December-WeekOne-2024)

9 min Read December 6, 2024 at 5:00 PM UTC

Tuesday

Nigeria Secures $2.2B in First Eurobond Issue Since 2022

Nigeria has raised $2.2 billion in its latest Eurobond auction, the first since March 2022, to address its widening fiscal deficit. The offering included $700 million in 6.5-year bonds at 9.625% and $1.5 billion in 10-year bonds at 10.375%. While oversubscribed with $9 billion in total bids, only $2.2 billion was allocated.The bonds, issued under the Regulation S/144A structure, attracted investors from regions including the UK, North America, Europe, and Asia. Proceeds will fund Nigeria’s 2024 budget, strained by declining oil revenues and rising public spending.Analysts noted the high yields signal investor concerns about Nigeria’s debt sustainability and economic outlook. Despite these challenges, officials view the strong demand as a vote of confidence in President Bola Tinubu’s administration and its fiscal reforms.

Nigeria’s Eurobonds underscore a fiscal strategy amid economic pressures. With yields of 9.625% and 10.375%, the auction highlights investor caution regarding the country’s debt burden. While oversubscription reflects global interest, the high-risk premiums signal doubts about Nigeria’s economic resilience and creditworthiness. The funds aim to stabilize a budget undermined by oil disruptions and low diversification. However, rising borrowing costs could pose long-term challenges for debt sustainability.

Prosus Reports $60M Profit in First-Half After Asset Sales

Prosus NV posted a $60 million adjusted EBIT profit for the first half of its fiscal year, reversing a loss from the prior period. The profit stemmed from $2 billion in asset sales, including its stake in China’s Trip.com and South Africa’s Superbalist.The group plans to use its $10 billion in deployable capital to bolster investments in AI, marketplaces, food delivery, and fintech, with India emerging as a key growth market. President and CIO Ervin Tu highlighted AI as a crucial enabler across Prosus’s ecosystem, adding that the firm may make larger investments in companies within its network.The Amsterdam-listed company’s revenue rose 26%, with adjusted EBIT for its e-commerce arm surging fivefold to $181 million. Prosus also made gains through its ongoing buyback program, which has created $36 billion in value

Under CEO Fabricio Bloisi, Prosus has streamlined its structure, aiming to double its valuation within four years. With a focus on high-growth markets like India, where IPO activity is accelerating, and continued investment in AI, Prosus targets $6.2 billion in annual revenues with over 20% organic growth. The company’s ability to monetize assets, such as its reduced stake in Swiggy, supports its strategy to unlock $100 billion in new value globally.

US Backs Angola’s Lobito Rail Corridor to Counter China

The US is investing heavily in the Lobito rail corridor, which links Angola’s Atlantic coast to the Democratic Republic of Congo (DRC) and Zambia. The goal is to secure access to critical minerals like copper and cobalt, which are essential for electric vehicles and the energy transition away from fossil fuels.Revitalized by a Trafigura-led consortium with US support, the 1,100-mile railway now delivers minerals in less than a week, down from over a month. The Biden administration has pledged $553 million to the project, alongside $1.6 billion for a new 500-mile line connecting Zambia’s copper belt to Lobito, bypassing the DRC. This initiative counters China, which dominates mineral production in the region and has heavily invested in alternate routes.The US has committed nearly $5 billion to projects along the corridor, including agriculture and energy, while Western companies like KoBold Metals and Barrick Gold are expanding operations in Zambia.

The Lobito corridor underscores the competition for Africa’s resources. The DRC and Zambia hold 10% of global copper reserves and most of the world’s cobalt. While Chinese firms dominate production, the US aims to reduce supply chain dependence on China. Investments in the rail corridor represent a strategic push to secure critical minerals and counter Beijing’s influence, with bipartisan support ensuring continuity despite leadership changes in Washington.

HUB2 Secures $8.5M to Expand Digital Payments in Francophone Africa

Ivorian fintech HUB2 has raised $8.5 million in Series A funding led by TLcom Capital, with participation from FMO, Enza Capital, Bpifrance, and Thunes founder Eric Barbier.The funding aims to expand HUB2’s payment infrastructure across Francophone Africa, enabling seamless integration for mobile money, bank transfers, cards, and cryptocurrency via a single API.Founded in 2019, HUB2 initially targeted e-commerce merchants and corporates but pivoted to serving fintechs exclusively, powering operations for 55 clients, including Djamo, Julaya, and CinetPay. The startup processes 98% of its transaction volumes for fintechs, with a projected €1 billion in transaction volume for 2024, up from €70 million in 2022.

HUB2 is tackling payment fragmentation in Francophone Africa, where mobile money dominates but interoperability gaps hinder growth. The company plans to scale its services, introducing cross-border payments, stablecoin remittances, and enhanced card payment options. Currently active in six countries, HUB2 aims for full regional coverage within two years. With digital payments on the rise, HUB2’s growth aligns with broader efforts to boost financial inclusion across Africa.

Zimbabwe Maintains Africa’s Highest Interest Rate to Curb Inflation

Zimbabwe’s central bank maintained its benchmark interest rate at 35%, the highest in Africa, reaffirming a tight monetary policy stance for 2025.The decision aims to anchor inflation expectations and stabilize the Zimbabwe Gold (ZiG) currency, according to Governor John Mushayavanhu.The ZiG, a bullion-backed currency launched in April, strengthened 12.7% against the US dollar in November, recovering from a 43% devaluation in September. However, the devaluation caused a slump in government revenue, eroded earnings, and pushed monthly inflation to 37.2% in October, the highest since the currency’s debut.

Zimbabwe’s hawkish monetary policy has bolstered the ZiG but faces challenges. Inflation, fueled by limited foreign reserves and reliance on central bank financing, threatens economic stability. While fiscal authorities predict lower inflation in 2025, analysts remain skeptical, citing structural vulnerabilities. The central bank’s stance reflects efforts to manage risks while navigating a volatile economic environment.

Namibia Elects First Female President as Ruling Party Holds Power

Namibia’s ruling South West African People’s Organisation (Swapo) retained power despite its weakest electoral performance. Swapo secured 51 of 96 elected parliamentary seats with 53.4% of the vote, down from 65.5% in 2019, amid dissatisfaction over unemployment, corruption, and inequality.The Independent Patriots for Change (IPC) gained 20.2% and 20 seats, with eight more parliamentary seats to be appointed by the president. Netumbo Nandi-Ndaitwah, 72, won the presidency with 57.3% of the vote, becoming the nation’s first female president.The IPC’s Panduleni Itula received 25.5%. Over 75% of Namibia’s 1.45 million registered voters participated in the election. The electoral commission dismissed opposition claims of irregularities, asserting the process was free and fair.

Nandi-Ndaitwah inherits a nation poised to become a hydrocarbon producer by 2029, driven by offshore oil discoveries in the Orange Basin. Her administration must balance resource management to ensure Namibians benefit while retaining investor confidence. Meanwhile, critical issues like 43% unemployment, drought, and housing shortages will test her leadership as she aims to address widespread discontent while maintaining stability.

Bitcoin Cross $100K as Trump’s Crypto Policies Boost Optimism

Bitcoin reached the $100,000 milestone on Wednesday, marking a historic achievement for the world’s largest cryptocurrency. The price surge reflects growing confidence in President-elect Donald Trump’s pro-crypto policies, including the nomination of Paul Atkins as the next SEC Chair. Trump’s administration is expected to usher in friendlier regulations, potentially positioning the U.S. as a global hub for digital assets.Bitcoin’s rise underscores increasing mainstream adoption. Exchange-traded funds (ETFs) from financial giants like BlackRock, Fidelity, and Grayscale Investments now hold $100 billion in assets, representing roughly 5% of Bitcoin’s total supply.This year’s 135% rally follows a recovery from the 2022 crypto crash, which saw major failures such as FTX and Genesis. At $100,000, Bitcoin’s market capitalization nears $2 trillion, surpassing the value of some national bond markets and rivaling major companies like Nvidia and Alphabet.

Bitcoin’s climb to $100,000 signals growing acceptance and resilience. Trump’s crypto-friendly policies, including discussions of a national Bitcoin reserve, could integrate the asset further into financial systems. However, uncertainties remain as regulatory clarity and market volatility continue to influence adoption. The milestone reflects not just speculative interest but also the increasing role of Bitcoin in institutional portfolios and global economic discussions. With constrained supply and robust demand, Bitcoin may be poised for further growth.

Ivorian Bank BICICI Announces Capital Increase via Reserve Allocation

BICICI (BICC), a leading financial institution in Côte d’Ivoire listed on the BRVM, has announced a capital increase of 40 billion CFA ($64 million) by incorporating reserves into its equity structure.The decision, approved by the company’s board, aims to strengthen its financial base and support future growth.The capital increase will be executed through the issuance of new shares, distributed to existing shareholders in proportion to their holdings. This move will enhance BICI-CI’s equity capacity without requiring fresh external funding, reinforcing its position in Côte d’Ivoire’s banking sector.

The capital increase underscores a prudent approach to financial management, leveraging internal reserves to bolster its equity base. This strategy highlights the bank’s focus on sustainable growth while avoiding shareholder dilution through external fundraising. Such moves reflect broader trends in Côte d’Ivoire’s financial sector, where institutions are prioritizing resilience and growth in a competitive and evolving market.

Angola Plans Privatization of State-Owned Airline TAAG in 2026

Angola will continue restructuring its state-owned airline, TAAG, next year as part of plans to privatize the 86-year-old carrier in 2026.Transport Minister Ricardo Viegas d’Abreu stated the goal is to attract a partner to reduce operating costs and expand TAAG’s international presence. The airline, which operates key routes to Angola’s provinces, Portugal, and Brazil, reported a $97.5 million loss in 2023 and has long relied on government support.The privatization aligns with Angola’s broader efforts to diversify its oil-dependent economy and attract foreign investment through infrastructure projects, including a $3 billion Chinese-built international airport expected to handle 15 million passengers annually.

The TAAG privatization comes as Angola positions itself to become a hub for African air travel. With aviation comprising only 2% of global activity, the sector offers significant growth potential. The government also seeks partnerships to support its sustainable development strategy, leveraging high-profile visits like President Joe Biden’s trip to boost economic diversification and attract investment beyond the oil sector.

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