SniperFx

Archives

  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • September 2022
  • August 2022
  • January 2022
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019

Categories

  • Analysis
  • Bonds
  • COVID
  • Crypto
  • Forex
  • Forex Trading
  • Ideas
  • Investing
  • Stocks
  • Uncategorized
  • World
  • Home
  • Forex
  • Crypto
  • Contact
0 Likes
0 Followers
0 Followers
Subscribe
SniperFx
SniperFx
  • Bonds
  • Crypto
  • COVID
  • Forex
    • Forex Trading
  • Ideas
  • Investing
  • Stocks
  • World

Explainer-What is at stake for investors in Angola’s elections?

  • admin
  • August 18, 2022
  • 3 minute read
Total
0
Shares
0
0
0

Angolan voters will choose next Wednesday between a party that’s been in power for nearly five decades and its main opponent for even longer, in what looks like the closest ever election in Africa’s second-biggest oil producer.

WHO ARE THE MAIN PLAYERS?

President João Lourenço of the MPLA, who has made reforming the corruption-plagued southern African country his priority since taking office in 2017, faces Adalberto Costa Júnior of the rebel-turned-opposition group, the National Union for the Total Independence of Angola (UNITA).

A May Afrobarometer poll gave the ruling MPLA, which has governed since independence from Portugal in 1975, a lead of 7% over UNITA. Analysts expect it to win despite growing support for the opposition.

WHAT IS AT STAKE FOR INVESTORS?

In Africa, only Nigeria produces more oil than Angola, according to OPEC, while Kimberley Process data ranks it as the world’s seventh-largest rough diamond producer.

One of Africa’s largest economies, Angola has been dominated by state-owned companies, a legacy of its socialist past. The government has embarked on ambitious privatisation programmes but progress has been slow. Restructuring state oil company Sonangol and diamond miner Endiama ahead of partial IPOs is expected by authorities to take another 12 to 18 months.

Lourenço has also opened anti-corruption probes against the previous MPLA administration.

After five years of recession, Angola’s GDP increased 0.7% in 2021, according to the World Bank, and the finance ministry expects growth of 2.7% for this year. Inflation is falling, but remains above 20%.

The return to growth linked to higher oil prices has, as usual, not benefited most Angolans, around half of whom live in poverty, according to the Angola Multidimensional Poverty Index. Such desperation could easily spill over into violence during the elections, said Risk Advisory Group’s Laura Seara Cabeça.

WHAT ARE MARKETS WATCHING OUT FOR?

Investors in the country’s $9 billion of outstanding Eurobonds are pricing in a win and a majority of the 220 parliamentary seats for the MPLA, which would mean the continuation of Lourenço’s market-friendly policies.

Angola’s Eurobonds currently yield above 10%, according to Tradeweb data, the level at which a country is often considered to be locked out from issuing new debt.

The country’s debt burden soared to a record high of 131% of GDP in 2020 and then fell to 75% last year, helped by higher oil prices.

A JPMorgan (NYSE:JPM) index of Angola’s bonds is down 9.3% in the last six months, compared with a 12.5% fall for the continent as a whole.

WHAT IS THE DIFFERENCE BETWEEN MPLA AND UNITA’s POLICIES?

Not much.

Both have presented similar proposals aimed at diversifying the economy and tax base away from oil, and encouraging investment in sectors such as renewable energy, fisheries and tourism, according to Fernandes Wanda, an economist at University Agostinho Neto in Luanda.

The MPLA, certainly, has yet to show political will to end Angola’s dependency on oil, said Jon Schubert, a political anthropologist at the University of Basel.

UNITA has promised to end the “concentration of the economy in a single political and social group” – a reference to Angola being one of the world’s most stratified societies, whose elite comprises only those with ruling party connections.

But the party has not criticised the government’s broader macroeconomic reforms because it would most likely pursue the same policies, according to South Africa-based independent analyst Marisa Lourenço, not a relative of the president.

Whoever wins still faces the whims of the price of oil, which still accounts for more than half of Angola’s government revenues and 94% of exports, according to the International Monetary Fund, which says any oil price fall could quickly trigger debt problems in the country.

Total
0
Shares
Share 0
Tweet 0
Pin it 0
admin

Previous Article

Asian FX Muted Before Fed Minutes, Australian Dollar Dips Below $0.7

  • admin
  • August 18, 2022
View Post
Next Article

Pioneering Japanese ‘butterflies’ designer Hanae Mori dies at 96

  • admin
  • August 18, 2022
View Post
You May Also Like
View Post
  • World

Explainer-Can ICC’s Philippines drugs war probe make progress if Manila cuts contact

  • admin
  • March 30, 2023
View Post
  • World

Taiwan president defiant after China threatens retaliation for US trip

  • admin
  • March 29, 2023
View Post
  • World

China’s Xi speaks with Saudi crown prince, supports Saudi-Iran talks

  • admin
  • March 28, 2023
View Post
  • World

SVB deal soothes broader markets, but stress haunts banks

  • admin
  • March 27, 2023
View Post
  • World

Putin Russia, China not creating military alliance -agencies

  • admin
  • March 26, 2023
View Post
  • World

Trump warns of ‘death & destruction’ if charged with a crime

  • admin
  • March 25, 2023
View Post
  • World

End to Taiwan ties nears as Honduras foreign minister goes to China

  • admin
  • March 23, 2023
View Post
  • World

Sterling to suffer notably if the BoE stands pat – Commerzbank

  • admin
  • March 22, 2023

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Recent Posts

  • New UBS CEO plays down concerns over size of Swiss bank combination
  • Bitcoin white paper makes its F1 racing debut on Kraken-sponsored car
  • EURCHF: Watch For Price Reversal Near The Resistance Zone
  • Sterling gives up eight-week peak on profit-taking
  • USD Makes A Small Comeback Before Weekend Despite Slowing PCE Inflation

Recent Comments

No comments to show.
Featured Posts
  • 1
    New UBS CEO plays down concerns over size of Swiss bank combination
    • April 1, 2023
  • 2
    Bitcoin white paper makes its F1 racing debut on Kraken-sponsored car
    • April 1, 2023
  • 3
    EURCHF: Watch For Price Reversal Near The Resistance Zone
    • April 1, 2023
  • 4
    Sterling gives up eight-week peak on profit-taking
    • April 1, 2023
  • 5
    USD Makes A Small Comeback Before Weekend Despite Slowing PCE Inflation
    • April 1, 2023
Recent Posts
  • ADA Bulls Buck Bearish Trends, Eyes Set on Breaching Resistance
    • April 1, 2023
  • Long COVID exercise trials proposed by NIH raise alarm
    • April 1, 2023
  • India Inc raises Rs 8.84 trillion via rupee bonds
    • April 1, 2023
Categories
  • Analysis (14)
  • Bonds (52)
  • COVID (79)
  • Crypto (71)
  • Forex (87)
  • Forex Trading (52)
  • Ideas (52)
  • Investing (52)
  • Stocks (95)
  • Uncategorized (40)
  • World (200)
SniperFx
  • Home
  • Forex
  • Crypto
  • Contact
Forex & Crypto Updates

Input your search keywords and press Enter.