12 °c
London
Monday, February 6, 2023
No Result
View All Result
FurtherAfrica
  • Countries
    • Angola
    • Botswana
    • Cape Verde
    • DRC
    • Eswatini
    • Ethiopia
    • Kenya
    • Malawi
    • Mauritius
    • Mozambique
    • Namibia
    • Nigeria
    • Rwanda
    • South Africa
    • Tanzania
    • Uganda
    • Zambia
    • Zimbabwe
  • Interviews
  • Understanding
  • Videos
  • Travel
  • Weekend
  • About
FurtherAfrica
  • Countries
    • Angola
    • Botswana
    • Cape Verde
    • DRC
    • Eswatini
    • Ethiopia
    • Kenya
    • Malawi
    • Mauritius
    • Mozambique
    • Namibia
    • Nigeria
    • Rwanda
    • South Africa
    • Tanzania
    • Uganda
    • Zambia
    • Zimbabwe
  • Interviews
  • Understanding
  • Videos
  • Travel
  • Weekend
  • About
No Result
View All Result
FurtherAfrica
No Result
View All Result
Home Africa

Hedge fund that never loses bets big on South Africa

Staff by Staff
May 14, 2020
in Africa, Banking, Capital Markets, Credit Rating, Currency, Finance, Government, Investing, Private Equity, South Africa
Reading Time: 2 mins read
832 17
1
South AFrican Business cofidence
Share via QRWhatsappShare on FacebookShare on TwitterLinkedInPinteresteMail

A London-based hedge fund that has made gains every year since it was founded, through risky bets including Ukrainian GDP warrants and sanctioned Russian bonds, is now putting its money on South Africa.

ProMeritum Investment Management LLP has allocated a fifth of its money — its biggest single holding — to South African government bonds, among the worst performers in emerging markets this year. It’s betting on a 15% rally in the next three to six months in response to the South African Reserve Bank’s aggressive policy easing and bond-buying in the secondary market. ProMeritum manages US$320M, and handed investors a 9.6% return last year.

Pavel Mamai and Anton Zavyalov, who together founded ProMeritum in 2015, argue that the coronavirus-induced crisis is different from typical emerging-market crises, as the risk of depression is pushing central banks to prioritize growth, while accepting currency depreciation as an inevitable release valve. Some emerging markets have not yet priced in the new reality, notably South Africa, where yields could tighten 150 basis points as bonds benefit from positive carry returns.

South Africa’s yield curve steepened to a record in May as investors piled into shorter-end securities after the central bank cut its policy rate to a record low. In dollar terms, however, the bonds have been among the worst performers in emerging markets as the rand’s slide to a record low against the dollar in April eroded returns. With inflation slowing and the economy set to contract as much as 6.1% this year, longer-dated debt may rally in coming months, ProMeritum’s founders said.

“With the National Treasury funding in the short end of the curve, we see significant value in medium to long term government bonds which trade at record steep levels,” Mamai and Zavyalov said in a note to clients.

The nation’s debt offers the highest yields in the developing world after Lebanon, Turkey and Nigeria, even after yields on the most-liquid 2026 securities fell to a five-year low. Investors lost about 25% this year in South Africa, the second-worst performance after Brazil, according to Bloomberg Barclays indexes.

Moody’s Investors Service cut South Africa’s credit rating to junk in March, triggering the country’s exclusion from the FTSE World Government Bond Index that is tracked by about US$3T of funds.

Source: Bloomberg

Related

Tags: FeatureFTSEFTSE World Government Bond IndexesGovernment bondsInvestingInvesting in AfricaInvestment ManagementMoody’s credit rating agencyPrivate EquityProMeritum Investment ManagementSouth AfricaSouth African Reserve Bankюжная-африкаجنوب-أفريقيا南アフリカ南非
ScanSendShare340Tweet212Share59Pin76Send
Staff

Staff

Related Posts

UK-Africa Investment Summit 2020: ‘Partners for prosperity’
Finance

British International Investment appoints head of Africa

by Africa Global Funds
February 6, 2023
Development

AfDB approves US$50M and €50M for ECOWAS EBID food security and agriculture

by Fabio Scala
February 6, 2023
IMF, World Bank say Africa to get US$57B from official creditors in 2020
Private Equity

Phatisa invests in MHL

by Africa Global Funds
February 6, 2023
Fintech

Proof of Reserve saves Africa’s crypto Industry from fake blockchain companies

by Web3Africa
February 5, 2023
Travel

Is travelling to Zimbabwe expensive? The truth

by See Africa Today
February 5, 2023
Platform Africa 2023
 
Mozambique eVisa
 
MozParks
 

Translate this page

Read the Latest

UK-Africa Investment Summit 2020: ‘Partners for prosperity’
Finance

British International Investment appoints head of Africa

by Africa Global Funds
February 6, 2023
0

British International Investment (BII), the UK's development finance institution (DFI) and impact investor, has appointed appointment Chris Chijiutomi as MD,...

Read more

AfDB approves US$50M and €50M for ECOWAS EBID food security and agriculture

February 6, 2023
IMF, World Bank say Africa to get US$57B from official creditors in 2020

Phatisa invests in MHL

February 6, 2023

Proof of Reserve saves Africa’s crypto Industry from fake blockchain companies

February 5, 2023

Is travelling to Zimbabwe expensive? The truth

February 5, 2023

FurtherAfrica Partners Network

The Exchange Club of Mozambique Taarifa Rwanda
TechGist Africa Africa Oil & Power Farmers Review Africa
Tanzania Invest Zambia Invest See Africa Today
Africa Global Funds Novafrica CrudeMix Africa
Harambee Africa Botswana unplugged Financial Insights Zambia
O Económico Digilogic Africa Web3Africa

Subscribe to FurtherAfrica

Enter your email address to receive new articles on your email.

Join 100,778 other subscribers.
FurtherAfrica

© 2021 FurtherMarkets

FurtherAfrica is a FurtherMarkets Limited platform

  • Countries
  • Interviews
  • Understanding
  • Videos
  • Travel
  • Weekend
  • About

Follow Us

No Result
View All Result
  • Countries
    • Angola
    • Botswana
    • Cape Verde
    • DRC
    • Eswatini
    • Ethiopia
    • Kenya
    • Malawi
    • Mauritius
    • Mozambique
    • Namibia
    • Nigeria
    • Rwanda
    • South Africa
    • Tanzania
    • Uganda
    • Zambia
    • Zimbabwe
  • Interviews
  • Understanding
  • Videos
  • Travel
  • Weekend
  • About

© 2021 FurtherMarkets

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?