Atta Financial Update - 27 September 2017

Executive summary: Investors have poured US$19.2 billion into local-currency emerging-market debt funds this year already.

What is driving these big flows: slowing inflation is a contributing factor but a weaker dollar is likely at the heart of increased appetite, which makes some emerging-market currencies look much stronger - a big part of EM bond popularity has essentially turned into a multibillion-dollar bet on the greenback.

EM nations have been selling debt at a record pace as borrowing costs have declined. The amount of local currency emerging-market bonds has more than doubled in the past seven years to US$4.4 trillion - this of course makes borrower countries more susceptible to difficulties should they be forced to refinance when borrowing conditions are less generous.

Could it be that a lot of the money flowing into EM bonds is simply chasing a rally in developing-market currencies? Always bet on black.

Fact: Thailand is the only Southeast Asian country that was never colonised by a European country


Highland Group to invest with Symbion Energy on gas project

  • Highland Group Holdings signed an agreement to co-invest US$100 million alongside Symbion Energy in a methane gas power generation project on Rwanda’s Lake Kivu

ASOC to invest in Okuhle Media

  • Africa Special Opportunities Capital has completed its deal to recapitalise Okuhle Media
  • The transaction is being completed via the ASOC Fund I, which typically invests up to R50 million (US$3.8 million) but the details of this transaction were not released

AFIG Funds to back FSDH Bank

  • Based in Nigeria, FSDH offers a range of services including merchant, corporate and investment banking solutions as well as asset and pension fund management services
  • The transaction was dibe via Atlantic Coast Regional Fund II which backs established, successful companies who are looking for growth capital
  • According to AFIG Fund’s website, the fund’s investment ticket size ranges between US$5 million and US$20 million