The African Development Bank has confirmed the addition of two new countries - Mauritius and Morocco into its Bloomberg African Bond Indices (ABABI), marking a steady progress in the Bank’s efforts to deepen the continent’s local currency bond market, reports ITREALMS.
The African Development Bank administers the ABABI, a family of African bond indices launched in February 2015 and calculated by the independent, global index provider Bloomberg.
At the launch, the indices included Egypt, Kenya, Nigeria, and South Africa. Botswana and Namibia joined in October 2015, and Ghana and Zambia in April 2017. Effective 1 January 2021, Mauritius and Morocco have become members of the ABABI, the Bank said.
“This is a positive development as the inclusion of Mauritius and Morocco, two of Africa’s better-rated issuers, will improve the overall credit quality of the ABABI, which now captures close to 90% of the outstanding amount of African sovereign local currency bonds,” said Stefan Nalletamby, Director of the Bank’s Financial Sector Development Department.
Mr. Nalletamby noted that in the current environment, the ABABI indices are a reliable tool for international investors to measure and track African sovereign bond markets. “This will be even more relevant following the COVID-19 crisis as sovereign debt managers, who will need to further diversify their local currency funding instruments, will also need to adjust their strategies, enhance transparency and widen their fixed income investor base, given the increased financing needs of the economies.”
The Index methodology for the current ABABI family can be found here.
The African Development Bank works to deepen the continent’s local currency bond markets and create an environment where African countries can access long-term financing. By providing transparent and credible benchmark indices, the Bank and Bloomberg provide investors with a tool to better measure and track the performance of Africa’s bond markets.
The Bank has also structured and invested in an exchange traded fund, the African Domestic Bond Fund (ADBF), replicating the index and providing investors with an innovative tool to gain exposure to African local currency fixed income. ADBF is listed in US dollars on the Stock Exchange of Mauritius and managed by Mauritius Commercial Bank Investment Management.
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