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Africa Focus Archive

September 24, 2015
Rationale for Investment in Sub-Saharan African Markets Remains Strong 

Speakers at EMTA’s Fifth Annual Sub Saharan African Forum reviewed the effects of the global slump in commodity pricing, as well as the US FOMC postponement of a rate hike, on the continent’s debt markets.  The event was hosted by ICBC Standard Bank on September 24, 2015, and drew a crowd of 100 market participants.

Moderator Stephen Bailey-Smith (Standard Bank) opened the session by observing that the market had been pummeled earlier in the day in a commodity-related rout.  However, “if people are just noticing now that Chinese demand for commodities is declining, they are late to realize,” he stated.  [Read More]

September 8, 2015
ICBC Standard to Sponsor EMTA’s Fourth Sub-Saharan African Forum in London
 

ICBC Standard will host EMTA’s Fourth Forum on Sub-Saharan Africa.  The event will take place on Thursday, September 24, 2015, at the ICBC Standard office at 20 Gresham Street in London.

Stephen Bailey-Smith (Standard Advisory) will lead a panel discussion on investment opportunities in the region.  Additional speakers include Kevin Daly (Aberdeen Asset Management), Andreas Kolbe (Barclays), Alex Garrard (BTG Pactual Asset Management) and Nema Ramkhelawan-Bhana (Rand Merchant Bank).

Invitations have been sent to EMTA members, who may register for the event at www.emta.org.  Non-members may also attend, with a US$695 registration fee.

In addition to the panel discussion, the Forum event will also include a cocktail reception.  Barclays and Rand Merchant Bank are providing additional support for the event.  

May 28, 2015
Updates to African Rate Source Definitions and Templates


Updates dated May 28, 2015 to several of the African rate source definitions contained in Annex A to the 1998 FX and Currency Option Definitions were published on the EMTA website.  The rate source definition for the Nigerian Naira was updated to correct the publication website and to clarify that the rate is actually an average of the published bid and offer quotations, the rate source definition for the Kenyan Shilling was updated to correct the publication time from 2:00 p.m. to 12:00 p.m., Nairobi time, and the rate source definition for the Zambian Kwacha was updated to reflect a new publication time of 11:30 a.m., Lusaka time.

In addition to the changes to Annex A, in a final bit of documentation housekeeping, a few, non-substantive corrections to the Template Terms for KES/USD and ZMW/USD Non-Deliverable Forward FX and Non-Deliverable Currency Option Transactions NDF and NDO Template Terms have been made.  The changes are very minor, are of a corrective or conforming nature and are as follows: Endnote No 4 in the KES and ZMW NDF and NDO Templates has been updated to refer to the updated publication time in the rate source definition, and, in all four sets of the Template Terms, “Currency Reference Dealers” in the first full paragraph of the term “Fallback Reference Price” has been corrected to simply refer to “Reference Dealers”.  Because of the minor nature of the changes, the original publication date of these Templates will not be changed.

In addition, and again based upon the minor nature of these updates to Annex A and corrections to the Templates, EMTA is not, at this time, recommending amendment of outstanding NGN, KES or ZMW contracts.  Parties, in their discretion, may determine otherwise.

July 2014 - New Fixings Support and New Documentation for African Currencies 

Effective July 21, 2014, ICAP handed over its Ghanaian Cedi, Kenyan Shilling and Zambian Kwacha fixings to Thomson Reuters in a planned transition. The EMTA African Currency Working Group assisted in advising on, and managing, the transition to ensure minimal market disruption.

Thomson Reuters has committed to a three stage process in connection with the handover and transition. The first stage involved the direct handover of the polling methodology and procedures used by ICAP to Thomson Reuters. The second stage will involve an augmentation of these procedures to ensure a more robust compliance with current good practices in the rate setting arenas and the third step will involve a transition away from a poll to a transaction-based fi x. Continued involvement by the EMTA African Currency Working Group is anticipated in connection with this third step.

In connection with the handover, EMTA published revised documentation for Ghanaian Cedi non-deliverable FX forward and currency option transactions, as well as new standard terms for Kenyan Shilling and Zambian Kwacha non-deliverable FX transactions. No multilateral amendment protocol was deemed necessary, and EMTA Members were provided with a suggested form of bilateral amendment agreement to use in their discretion.

CLICK HERE to see the new and amended Template Terms for Non-Deliverable FX Forward and Currency Option Transactions for GHS, KES and ZMW. 

April 2014 - EMTA’s African Currency Working Group Meets To Address Fixing Source Issues for GHS, KES and ZMK 

Recently, ICAP informed EMTA and the market that it is seeking an orderly exit from the business of servicing and supporting fi xings for the Ghanaian Cedi, Kenyan Shilling and Zambian Kwacha. This determination followed a review by ICAP of the requirements set forth in the IOSCO Principles for rate
setting exercises.

ICAP notified EMTA of its determination and requested EMTA to assist and support an effort to identify acceptable alternatives for the market and to develop a plan of transition that would minimize market disruption. EMTA arranged a conference call of the African Currency Working Group and this group has begun a series of discussions to address the need for replacement fi xings in each of these three markets. EMTA Members are welcome to join this Working Group.

During 2012, EMTA had worked closely with its members to standardize terms for GHS non-deliverable FX forward contracts, and assisted ICAP in developing a methodology and a procedure for administering an exchange rate quotation for the Ghanaian Cedi. This methodology adopted many of the fundamental principles of the EMTA exchange rate quotation methodologies (for example, the ARS Industry Survey). Following the launch of the ICAP GHS Survey, at the request of the market, ICAP replicated the effort for the Kenyan Shilling and the Zambian Kwacha (although EMTA did not produce standard documentation for either of these currencies) and for the last several years, ICAP has successfully provided fi xings to the market for these three currencies based upon a polling methodology.

February 2014 - Bank of Ghana Foreign Exchange notices  

Bank of Ghana Notice to Banks and the General Public on Repatriation of Export Proceeds PDF Download
Bank of Ghana Revised Rules on the Operations of Foreign Exchange Accounts and Foreign Currency Accounts PDF Download 


September 2013 - Standard Bank to Sponsor EMTA Sub-Saharan African Forum in London
Standard Bank will host EMTA’s second Forum on Sub-Saharan Africa. The event will take place on Monday, October 7, 2013, at the Millbank Tower, 21-24 Millbank in London.

Stephen Bailey-Smith (Standard Bank) will lead a panel discussion on investment opportunities in the region. Additional speakers include Kevin Daly
(Aberdeen Asset Management), Mohammed Hanif (Insparo Asset Management), Didier Lambert (JPMorgan Asset Management) and Nema Ramkhelawan-Bhana (Rand Merchant Bank).

Invitations have been sent to EMTA Members, who may still register for the event at www.emta.org. In addition to the panel discussion, the Forum event will also include a cocktail reception.

For more information, please contact Jonathan Murno of EMTA at jmurno@emta.org

 

September 2013 - EMTA Working Group Monitors Implications of Egyptian Political Unrest For FX Contracts
Once again, political unrest in Cairo and a declared moratorium necessitated a watchful eye by market participants. On the first day of the moratorium, the FEMF rate was not published by the Central Bank of Egypt. In response, EMTA quickly reached out to the members of its Egypt NDF Working Group to discuss the lack of a fixing, the political situation and the implications for open Egyptian Pound NDF and NDO contracts.

The Working Group members sought clarity on how the political and market events would be treated under the EMTA-published standard contract terms for NDFs and NDOs and agreed that the declaration of the moratorium and the lack of a fixing triggered the postponement or deferral of valuations of contracts for that day. The group also sought clarity as to how the contracts were intended to work in the case of a continued lack of a fixing, and in particular how the waterfall of disruption events and fallbacks might unfold. In particular, the potential need to activate the EMTA EGP Indicative Survey was anticipated and the group agreed that preliminary steps to alert the participant banks and to line up the various administrative processes were in order. These outreaches were initiated.

Several days later, an FEMF rate was subsequently published, stopping the clock, for the time being, on the postponement or deferrals of valuations, but the Working Group has continued and will continue to monitor the situation and maintain its preparedness in light of the likelihood that the FEMF Rate could again be disrupted due to the current political circumstances.

EMTA Members wishing more information may contact Leslie Payton Jacobs at lpjacobs@emta.org.

 

June 2013 - EMTA to Hold Forum on Sub-Saharan Africa in London
EMTA will hold its Third Forum on Sub-Saharan Africa in London on Tuesday, October 8, 2013. Standard Bank will sponsor the event. The event will include a panel discussion moderated by Stephen Bailey-Smith of Standard Bank. Additional speakers will be announced shortly. For more information, please contact Jonathan Murno of EMTA at jmurno@emta.org.

 

June 2013 - EMTA Notifies Members of Warrant Payments
For many years, EMTA has routinely monitored information on various warrants issued in Brady bond exchanges.

During the first quarter, EMTA notified its members of the payment amount and effective record date of March 29, ex-dividend date of March 27 and payment date of April 15, 2013 in respect of Venezuela warrants, as well as the payment amount and payment date of May 15, 2013 in respect of Nigeria warrants.

This information can be found on EMTA’s website in the New Developments area (http://www.emta.org/newdev.aspx), as well as in the individual relevant countries’ Market pages (http://www.emta.org/markets.aspx).

 

March 2013 - EGP/USD Rate Source Definition Revised
Recent events in Egypt necessitated a review, with an eye toward revision, of the EGP FEMF (EGP01) rate source definition included in Annex A of the 1998 FX and Currency Option Definitions. This rate source is the primary rate source recommended by EMTA for EGP/USD NDFs. Earlier this year, the quoting entity for this rate ceased publishing a rate at 12:00 pm and began publishing rates at 11:30 am and 12:30 pm, as well as at 2:00 pm. This threw into disarray the rate source definition as currently drafted, necessitating an immediate intervention to avoid market confusion. EMTA’s EGP NDF Working Group began an effort to develop an alternate formulation of the rate source definition which would reflect the group’s viewpoint on which of the rates during the day provided the optimal “fix” as well as building in flexibility going forward should the times change again. A revised definition was prepared and circulated to the FXC and ISDA for review. Until such time as the new rate source definition was finalized and applied to trades, the group determined to adhere to the construct in the current definition and use the 2:00 pm rate as the fixing rate in the absence of a rate being available at 12:00 or 1:00.

On March 25, the new rate source definition was made effective and EMTA issued its FX and Currency Derivatives Market Practice No. 67 to accompany and explain the revisions. This market practice recommends that effective March 25, the EMTA Template Terms for EGP/USD Non-Deliverable Forward FX and Currency Option Transactions incorporate the revised definition. In addition, to accommodate those EMTA members wanting to amend outstanding transactions to incorporate the revised definition, EMTA agreed to host a multilateral amendment. EMTA published a form of a multilateral amendment agreement to facilitate the amendment of trades among EMTA members (only), as well as a form of bilateral amendment agreement which can be used by EMTA members to amend trades bilaterally with customers or non-EMTA members. These documents, along with instructions on how to sign the multilateral amendment, are on the EMTA website.

Members Only may CLICK HEREto view the new Market Practice, CLICK HEREto view the new definition and CLICK HEREto view the forms of amendment and the instructions. November 2012 - Cote d'Ivoire Consent Solicitation Update
Press Release announcing that the requisite consents have been obtained in connection with the previously announced solicitation of consents of holders of Ivory Coast's U.S. Dollar Denominated Step-Up Bonds due 2032 (ISINs—Reg. S: XS0496488395; 144A: XS0496608984)

 

October 2012 - Cote d'Ivoire Presentations
Republic of Cote D'Ivoire Presentations - in English and French.

 

September 2012 - Cote d’Ivoire Informs EMTA Members that It Will Make June 2012 Payments
The Finance Minister of the Cote d’Ivoire asked EMTA to forward to its Members on June 14 a Communiqué in which it confirmed its instruction to its trustee paying agent to transfer US$43,727,793.75 in respect of the June 30, 2012 coupon payment on the 2032 bonds, as well as a ‘good faith’ payment of US2,098,934.10, representing 2.4% of the total amount due in respect of the December 31, 2010, June 30, 2011 and December 31, 2011 coupon payments in arrears. Click Here for the full text of the Republic’s Communiqué.

Also, on July 5, the Finance Minister asked EMTA to forward to its Members a Communiqué in which it stated that it “will make a reimbursement proposal to the holders of the 2032 Bonds in respect of the outstanding balance” owing. Click Here for the full text of the Republic’s Communiqué.

When the first interest payment was not made on December 31, 2010, EMTA, upon the expiration of the 30-day grace period, issued a recommendation for flat trading of the bonds, beginning on February 1, 2011. Click Here for the full text of this Market Practice recommendation, which remains in effect despite the anticipated June 30 payment (and Click Here for the most recent EMTA affirmation of its flat trading Market Practice recommendation).

EMTA had circulated other memoranda to its Members at the request of the Cote d’Ivoire government on January 10, 2011 , April 29, 2011, June 1, 2011, July 8, 2011, November 21, 2011 and January 13, 2012. From time to time, EMTA has also circulated communiqués from other EM governments, at their request, detailing information about restructurings or other information of interest to the investment community. For further information, please contact Aviva Werner at awerner@emta.org. 

 

June 2012 - Cote d’Ivoire Informs EMTA Members that It Will Make Payments on July 2, 2012
The Finance Minister of the Cote d’Ivoire asked EMTA to forward to its Members on June 14 a Communiqué that it will make a payment in respect of its 2032 Bond on July 2 (with a record date of June 29), and that it will also make a ‘good faith’ payment in an amount equal to 2.4% of the total outstanding coupons in arrears.

When the first interest payment was not made on December 31, 2010, EMTA, upon the expiration of the 30-day grace period, issued a recommendation for flat trading of the bonds, beginning on February 1, 2011. Click Here for the full text of this Market Practice recommendation, which remains in effect.

EMTA had circulated other memoranda to its Members at the request of the Cote d’Ivoire government on January 10, 2011, April 29, 2011, June 1, 2011, July 8, 2011, November 21, 2011 and January 13, 2012. From time to time, EMTA has also circulated communiqués from other EM governments, at their request, detailing information about restructurings or other information of interest to the investment community.



June 2012 - EMTA Announces Africa Focus Portal
EMTA is proud to announce the Africa Focus Portal, a new online resource on the EMTA website. In recent years, many African markets have become increasingly viable and members institutions have expressed interest in investing in these markets. The Africa Focus Portal provides access to banks and investors looking for documentation to facilitate trades or researching African markets. The Africa Focus Portal consolidates all of EMTA’s Africa-related resources. The portal includes: 

- updates on ongoing EMTA projects related to African markets;
- Market Practices and Standard Documentation for both Fixed Income and Currency Derivative instruments;
- New Developments and Key Industry Views;
- an archive of reports and white papers related to EMTA events and workshops;
- an archive of litigation related to Africa; and more.

We invite our members to let us know what other types of information they would like to see included in the portal.
The url for the portal is www.emta.org/africafocus. For more information please contact Leslie Payton Jacobs (lpjacobs@emta.org) or Leo Hsu (lhsu@emta.org).



May 2012 - EMTA Publishes Standard Terms for GHS/USD Non-Deliverable FX Transactions
On May 2, 2012, EMTA published its FX and Currency Derivatives Market Practice No. 65, which recommended standard terms for Ghanaian Cedi / U.S. Dollar non-deliverable forward FX and currency option transactions, and published the EMTA Template Terms for GHS / USD Non-Deliverable FX Transactions and the EMTA Template Terms for Non-Deliverable Currency Option Transactions (together, the "GHS Template Terms") for use effective May 9, 2012.

The GHS Template Terms represent the second set of standardized terms for African currency-denominated FX and currency derivatives transactions published by EMTA, and build on the standards set out in the EMTA Template Terms for NGN / USD Non-Deliverable FX Transactions dated December 27, 2010 (the "NGN Template Terms"), which adhere to the broad principles developed and followed by EMTA in its efforts to standardize market practices and documentation for NDF transactions. In addition to the GHS Template Terms, EMTA also published the EMTA GHS Indicative Survey Methodology dated May 9, 2012, and, in conjunction with co-sponsors, ISDA and the FXC, published new GHS rate source definitions for inclusion in Annex A to the 1998 FX and Currency Option Definitions.

EMTA’s recommendations, which are reflected in the GHS Template Terms, include a primary settlement option of a newly-developed industry survey administered by ICAP Broking Services South Africa (Pty) Ltd., Price Source Disruption as the only Disruption Event, Disruption Fallbacks consistent with the NGN Template Terms, a Deferral Period of 14 calendar days, Accra as the only Relevant City for Business Day for Valuation Date, and New York as the only Relevant City for Business Day for Settlement Date. Please see the GHS Template Terms for these, and other, provisions.

For copies of the Market Practice, the GHS Template Terms, the rate source definitions or the Survey Methodology, please see the FX and Currency Derivatives Documentation area of EMTA’s website.



March 2012 - EMTA African Currency NDF Group Moves Ahead with Its Focus on Ghana Cedi
The EMTA African Currency FX Working Group had been meeting by conference calls that span four time zones to discuss the market’s need for an exchange rate quotation for the Ghanaian Cedi.  This was viewed by the Group as an essential precursor to the potential development of the Cedi market, in line with EMTA’s mission to develop fair and transparent trading markets for Emerging Market assets.

Over the course of several months, the Group debated how best to accomplish the task of supporting the development of an exchange rate quotation, taking into consideration, among other things, timing, logistics, and ability and willingness to commit resources to what is a nascent market, and, in the process, evaluated several options.  ICAP Broking Services South Africa, an EMTA member, indicated its willingness to support an industry-driven poll-based GHS/USD fixing, and the Group voted to encourage ICAP to move ahead.  Following this decision, the Group worked with ICAP to outline parameters for an ICAP-sponsored survey methodology and to identify and reach out to a group of potential participant banks in the local market.  Once the survey methodology and the participant banks were in place, a test survey was commenced which was conducted over a period of several months.  The test survey was monitored by the Group through daily reports of the fixings.  Several changes and clarifications to the methodology and the conduct of the survey were made during the test period.

The daily Cedi fixings are now available on a newly developed, publicly accessible Thomson Reuters Screen ICAPFIXINGS Page.

With this first, necessary step accomplished, the Group has turned its attention to the matter of addressing a need for documentation and has begun the process of developing Market Practices, including the eventual publication of standard Template Terms for GHS/USD non-deliverable forward FX transactions.  This work is in process and will take place over the next several months.  Following the normal EMTA processes, once the Group has designed the Market Practices and the forms of confirmation, these will be circulated to the wider EMTA community for review, comment and approval.



March 2012 - EMTA African Currency NDF Group Discusses Kenyan Shilling
Following the successful launch of its Ghanaian Cedi project, Members of the EMTA African Currency NDF Group have indicated a similar interest in the development of an infrastructure for trading the Kenyan Shilling on a non-deliverable basis.  The Group is currently looking at supporting similar efforts for the Kenyan Shilling market.



March 2012 - Cote d’Ivoire Informs EMTA Members that It Will Make Payments in June 2012
The Finance Minister of the Cote d’Ivoire asked EMTA to forward to its Members on January 13 an invitation to participate in a meeting on January 23 in London where he informed the Republic’s 2032 bondholders of the latest developments in the normalization of Cote d’Ivoire’s relationships with the International financial community.

At the meeting, the Republic advised its investors that it will make a ‘good faith’ payment in June 2012 of US$2.1 million, as well as a payment of US$87.5 million related to the December 31, 2010, June 30, 2011 and December 31, 2011 coupon payments ($29,153,662 each) in arrears.  Click Here for the full text of the Republic’s Presentation.

When the first interest payment was not made on December 31, 2010, EMTA, upon the expiration of the 30-day grace period, issued a recommendation for flat trading of the bonds, beginning on February 1, 2011.  Click Here for the full text of this Market Practice recommendation, which remains in effect.

EMTA had circulated other memoranda to its Members at the request of the Cote d’Ivoire government on January 10April 29June 1July 8 and November 21.  From time to time, EMTA has also circulated communiqués from other EM governments, at their request, detailing information about restructurings or other information of interest to the investment community.



December 2011 - EMTA African Currency NDF Group Focuses on the Ghanaian Cedi and the Kenyan Shilling
Recently, the EMTA African Currency NDF Working Group  met by conference call to discuss launching an EMTA effort in the Ghanaian Cedi market.  This follows on the efforts made by this same working group with its 2010 foray into regularizing the Nigerian Naira NDF market which resulted in the publication of standard documentation and market practices for the trading of NGN/USD NDFs and NDOs.  Other Africa-focused initiatives by EMTA over the years include the monitoring of Nigeria’s Payment Adjustment Rights, several conferences focusing on private sector investment issues in Nigeria and elsewhere in Africa and recent actions by Cote d’Ivoire relating to its bonds.

Seeking to build on these previous efforts, EMTA has undertaken to develop a more integrated  focus on the Africa markets in general and recently met with a number of its London-based members which have strong presences in Africa to understand the kinds of initiatives EMTA might consider in order to better serve its members in this market.


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