African Domestic Bond Index Family

The ADBI family comprises a series of benchmark indices and a Bond markets Development index. The African Bond Markets Development Index (ABMDI) is a ranking of African local bond markets established by the AFMI team.

The benchmark series of indices are a rules-based market value weighted composite index calculated by Bloomberg BVAL Methodology. 

1) The African Development Bank (AfDB) through the African Financial Markets Initiative (AFMI) launched in 2014, the AfDB/AFMISM Bloomberg® African Bond Index (ABABI) with four countries South Africa, Egypt, Nigeria and Kenya. In September 2015, Botswana and Namibia joined the index, followed in April 2017 by Zambia and Ghana.

The composite index available to Bloomberg Professional® service subscribers via {BADB Index} was enriched with two sub-indices (BADBC and BADBX) and released in January 2018 to improve African debt market liquidity and transparency.

a) The new {BADBC Index} is the capped version of the African Bond Index (ABABI) with a maximum exposure of 25% per country.

b) The {BADBX Index} excludes South Africa. 

The enhancement of the composite index family will provide investors with more diversified baskets, thus reducing their exposure to one major country.

To be included in the index, a security must have at least one year remaining to maturity and withstand price stability tests. In partnership with Bloomberg, the AFMI will be reviewing the addition of new countries on a biannual basis, i.e. June and December.  

2) The African Bond Markets Development Bond Index (ABMDI) series are reflective of the recent developments of the local bond markets, some of which have gained in strength in terms of liquidity and maturity profile using a common set of indicators as per the local currency bond markets diagnostic framework. The 2017 annual ABMDI report is available on the AFMI website.

The AFMI works to deepen the continent’s local currency bond markets and strives to create an environment where African countries can access financing at variable terms. By providing transparent and credible benchmark indices, the AFMISM Bloomberg® African Bond Index equips investors with a tool to measure and track the performance of Africa’s bond markets.

Recent Developments in Local Currency Bond Markets (LCBMs)

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