Botswana and Namibia join the African Bond Index
The index aims to bring transparency to most liquid African bond markets.Botswana and Namibia will soon join the AFMISM Bloomberg® African Bond Index (ABABI), the African Development Bank (AfDB) has announced.
In February 2015, the institution partnered with Bloomberg to launch the Index through the African Financial Markets Initiative (AFMI).
Calculated by Bloomberg Indices, the index includes the Bloomberg South Africa, Egypt, Nigeria and Kenya local currency sovereign indices, considered as the four most liquid bonds in Africa. They will be joined from October 2015 by Botswana and Namibia.
"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," says Stefan Nalletamby, the Director of the Financial Sector Development Department of the AfDB.
The expanded index will now include the six most liquid sovereign bond markets in Africa and three sub-indices for different maturity ranges.
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.
To be included in the index, which is available to Bloomberg Professional service subscribers, a security must have at least one year remaining to maturity and withstand price stability tests.
"There is a clear need for a transparent and objective benchmark for sovereign debt in Africa. Well-crafted indices are essential in the assessment of value in markets while contributing to liquidity by giving investors a benchmark to evaluate their performance," David Tamburelli, Head of Emerging Markets Product, Bloomberg L.P, said at the launch of the index in February.