Ecobank launches bond index for Sub-Saharan Africa
Ecobank Group has announced the launch of the first benchmark index to measure the performance of Sub-Saharan African domestic bond markets.Ecobank Group has announced the launch of the first benchmark index to measure the performance of Sub-Saharan African domestic bond markets.
The Ecobank Middle Africa Bond Index (MABI) was developed in partnership with Nedbank Capital and will be dedicated to sovereign local currency denominated debt in Sub-Saharan Africa (excluding South Africa).
Paul-Harry Aithnard, Group Head of Research at Ecobank, said this index, which is introduced at a time when investor appetite for domestic African bonds is increasing, will act as a performance benchmark for investors looking to diversify their African fixed income portfolio or to broaden their overall exposure to frontier markets.
"The Ecobank MABI is likely to attract more investors to Middle Africa's bond markets and, ultimately, improve market liquidity", he added.
According to a study published in the October 2007 issue of the French Central Bank newsletter, the development of bond markets appears to be beneficial to emerging countries because they are useful in the conduct of monetary policies and are contributing to a better performance of financial markets.
This development usually corresponds to the State need for financing, the recapitalisation of the banking system and in several countries, the insufficiency of bank financing.
It offers an alternative to banking deposits for savers, improves business transparency and mitigates risk.