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AfDB expands African bond index

By on September 4, 2015

The African Development Bank on Wednesday said it had expanded its bond index as part of its commitment to bringing transparency to most liquid African bond markets.

The expansion will see Botswana and Namibia joining the AfDB African Bond Index, which Nigeria is already part of, later this year, according to a statement by the bank.

The African Development Bank, through the African Financial Markets Initiative, launched its AfDB/AFMI Bloomberg African Bond Index in February this year.

According to the statement, calculated by Bloomberg Indices, the composite index is currently comprised of the Bloomberg South Africa, Egypt, Nigeria and Kenya local currency sovereign indices.

Namibia and Botswana would be included from October, the statement added.

The Director, Financial Services Sector Development Department, AfDB, Stefan Nalletamby, was quoted as saying, “As more African countries are increasingly looking to domestic capital markets to source much needed financing for economic development, we are delighted to welcome Botswana and Namibia to the index and expect to include more countries to it as soon as reliable pricing information is made available.”

The AfDB added that the expanded index would now include the six most liquid sovereign bond markets in Africa and three sub-indices for different maturity ranges.

To be included in the index, a security must have at least one year remaining to maturity and withstand price stability tests.

According to the statement, the AFMI works to deepen the continent’s local currency bond markets and also strives to create an environment where African countries can access financing at variable terms.

By providing transparent and credible benchmark indices, the AFMI Bloomberg African Bond Index provides investors with a tool with which to measure and track the performance of Africa’s bond markets.

 

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