LE CAPITAL

With the recent fall of Cobalt prices copper is still able to reasonably keep local liquidity a float. However, signs of droughts are felt owing to various factors including projects end of cycles and reinvestments decisions to be weighted against public scrutiny over regulatory measures. A rebound of copper prices would be a welcoming factor at this point while expecting the revival of the almighty cobalt announced for the second half of the year. https://www.wsj.com/articles/copper-rallies-on-chinese-infrastructure-hopes-11560265158

A series of technological advancement in the financial world recently got me thinking about the future of the banking system as we know it today. The inherent role of banks is centered on taking deposits, making payments and providing or brokering funding. Today, their deposit-taking role competes with money market instruments proving better returns for idle money. As such, the deposit growth of the top 5 American banks is negatively correlated to FED rates and the subsequent attractiveness of money markets investment avenues. Money markets, together with debt capital markets, are also and increasingly duplicating the lending role assumed by the banking system. Lending to large corporates has got increasingly competitive and unprofitable for banks because of the lower interest rates they command. Banks are better off brokering deals for debt markets in return for a fee . Banks’ transactional role is not better off. Last year has seen for the first time, the amount of globa...

A number of African countries are betting on rail to achieve regional or transnational integration. Continent wide, an increasing amount of regional rail projects are being implemented. In the north: Ethiopia to Djibouti, West: Niger to Togo and east Africa: plans of linking Rwanda to Ethiopia. That could contribute to making the continent a giant free trade area ; a giant step for a fully integrated and interconnected Africa. With an existing network of 5033 kms ideally position between mineral extraction areas (center, east and south) and two principal sea exit points in the South: Durban via Zambia and Benguela via Angola, the DRC can find in rail an interesting competitive advantage for its trade. Solely looking at it from the option of mineral and good transport, this represents a cost effective and faster option than road (the continent still counts a number of board posts). Locally, the privatization of those railways, at least partially, might be the only way to...

Les banques commerciales financent par excellence des projets existants. Leur principale structure se situe quelque part entre le crédit à court terme et à moyen terme se focalisant sur des flux de trésorerie émanant des entités financées. Cependant la vaste majorité des opportunités à financer en RD Congo et en Afrique sont des projets non-existants. Pour résorber les déficits d’un certain nombres de domaines: l’alimentaire, l’énergétique, l’académique (pour ne citer que ceux la), de nouveaux projets doivent impérativement voir le jour au delà de l’expansion du nombre limité de ceux déjà existants. Il est donc paradoxal que ces PME continuent d’être essentiellement financées (pour celles qui le sont) par des banques commerciales pas tout à fait outillées pour faire face au profil financier de ces entités. De cet état de fait provient l’éternel jeu de ping-pong entre « financiers et financés » avec   ces perpétuelles accusations contre le caractère capitaliste de l...

Le mois dernier, le Gouvernement Congolais a publié les récents chiffres de sa croissance annuelle. Celle-ci fait état d’une progression de l’ordre de 9,5%. La part des financements locaux comme catalyseur de cette croissance fait encore débat. L’on peut analyser la question en se basant sur deux secteurs majeurs qui, d’après la banque centrale du Congo, sont les fers de lance de cette croissance : l’industrie minière et celle des services avec, notamment, le secteur des télécommunications. Au delà du fait que le lien de cause à effet entre secteur primaire et croissance économique reste discutable , les banques Congolaises n’interviennent que très peu dans le financement d’expansions d’opérations minières productrices de richesses car bien trop limitées par leurs tailles de bilan. Les fonds  nécessaires à ces types d’investissements sont presque toujours levés à l’étranger. De plus, il se pose bien souvent le problème de l’expertise nécessaire permettant de mitiger l...

The beginning of this year has seen a number of African countries planning to raise financing from the sovereign debt market. Ivory Coast, Rwanda and Angola have planned debt raising in February this year. I took the opportunity to look at Congo’s attractiveness to these very inventors. Ivory coast’s economy has many similarities with DR Congo’s: Similar GDP sizes averaging USD 31 Bn, growth rates at 8%, inflation rates around than 3%, budget deficit at 2 to 3% and, interestingly enough, similar sovereign ratings with S&P’s B- for Congo and B for Ivory Coast. So why has the later been able to oversell two sovereign bonds in less than a year while DRC fails to appeal even to the most yield starved investors?  Would i lend a penny to DRC ? S&P  gave us gross indications citing weak institutions, continuing conflict, poor governance, extremely low-income levels (70% of the population lives under poverty line ),  heavy dependence on external...

Financing possibilities of the DRC economy are scarce.    Similarly to the entire Sub-Saharan Africa, DRC is a market mainly attractive to bankers for transactional purposes likely to be sustained by the large amount of prospective clients. In view of local bank’s timid funding strategies, looking at the country for the potential it holds to host attractive venture opportunities is seldom the rule. This is especially true for start up companies which most scholars believe remain a significant component of the solution to the region’s development issues; despite their high-risk nature. I therefore borrowed key note speaker star Josh Linkner’s model for   disciplined dreaming   and asked myself his three key questions concerning the subject matter: Why? What if? Why not? Why? The reason why start ups firm fail to develop in the Congolese context is often attributed to a vicious circle citing lack of financing as the main reason. But do we have what it...