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Monthly Finance & Infrastructure Updates – September

Monthly Finance & Infrastructure Updates – September

The global economy seems to finally be in a state of recovery after a long period of fragile growth. Stock markets, internationally, have begun performing considerably better, reaching all-time highs, not paying too much attention to Donald Trump’s words on  North Korea at the UN or even the caution around the latest Federal Reserve interest rate.

The MSCI All Country World Index shows in their broad measure of global shares that a new peak has been reached of 487.48.

Hedge Funds Focus | Global

Hedge fund strategies have gained momentum seeing a decent gain of 6% in US dollar terms, over the last 12 months with several factors positively contributing to it. Rising US interest rates, fluctuations in global currencies and widening dispersion of equity returns are all creating an environment for future strengthening.

Public Private Partnerships Focus | Nigeria

The Nigerian Federal Government has launched a PPP disclosure web portal formally named: the ICRC PPP Contracts Disclosure Web Portal.  The first of its kind, this portal has been put in place to ensure transparency and accountability in the PPP environment, hopefully creating attractive circumstances for foreign capital and expertise to invest in the country’s infrastructure. This strategy by the Nigerian Federal Government is ultimately set to promote sustainable growth and development.

Alternative Investments Focus| Global

In North America, institutional investors have an average allocation of 29% to alternative asset classes. In Europe, it stands at 24%. South African institutions are however lagging behind, allocating less than 2% of their portfolios to alternatives. This could be due to accessibility and the difficulty of getting exposure to different asset alternatives, or it could also be that traditional asset classes tend to do well in this region.

However, lower real returns are being expected and alternatives is becoming a hot topic. Private Equity in South Africa is growing, with last year’s allocations increasing by 5%.

Infrastructure Focus| Africa

Africa’s roads have taken centre stage this month as the importance of boosting intra-regional trade amongst certain Pan-African countries was looked at by the World Road Association. With a combined population of 625 million and a total GD of $1.6 trillion, the African Highway networks as well as rural roads play an integral part in the continents trade activities.

Infrastructure Focus| Uganda

Heavy rains are causing mudslides, embankments washouts, pavement submergence and bridge failures in Uganda, especially in the mountainous areas of Elgon, Ruwenzori slopes. This has disrupted road maintenance planned by the Uganda Road Fund (URF)

Country Focus | South Africa

Despite South Africa being so successful in utilising the PPP model, the number of new project transactions have slightly declined.  The South African Government is putting renewed focus on PPP transactions expecting to increase the project value to R5.9 billion in 2019/2020.  These projects would account for 1.7 % or R16.5 billion of the total R947.2 billion planned public sector infrastructure spending over the next three years, looking for 305 growth in infrastructure investment by 2030.

31 PPP projects valued at R65.3 billion have been started and finished since this type of partnership was first introduced in South Africa in 1998.

Pensions Focus | South Africa

South African Finance minister Malusi Gigaba promised the nation that Africa’s biggest money manager, Public Investment Corp, won’t be asked to provide funds to put into struggling state-owned entities such as South African Airways. This could put pensions of government workers at risk.

 

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