Halister News

(Bloomberg) -- Debt dynamics likely to worsen in 2016, suggesting further ratings downgrades in region, Barclays strategists Andreas Kolbe, Ridle Markus say in weekly emerging markets report.

• Zambia, Gabon, Angola, Nigeria, Mozambique, Cameroon at risk of further negative rating action; Senegal, Rwanda, Ivory Coast well placed to maintain ratings “at very least”
• Commodity price slump means financing needs increase, should result in rise in supply from continent
• Less ample liquidity, challenged fundamentals means issuers will likely need to offer sizable new issuance premia to attract demand; likely to pressure spreads in secondary markets
• Recommends buying Ethiopia’s 2024 bonds; recent underperformance is overdone, offers value relative to peers, opportunity to add
• Sub-Saharan Africa 2016 GDP to avg 3%, vs 2.8% in 2015; Senegal, Ivory Coast, Ghana likely to produce strong growth rates: Barclays
• Recommends exposure to Ivory Coast, Senegal, Namibia; positive on Ghana from M/T risk/reward perspective
• Namibia’s underperformance not justified fundamentally; continue to see current spread levels as an opportunity to add to exposure: Barclays