AFMI Weekly Insight February 16th 2018

9 February 2018


Headlines

  • The African Development Bank has updated its composite index available to Bloomberg Professional® service subscribers via {BADB Index}. The index, which is enriched with two sub-indices (BADBC and BADBX), was released in January 2018 to improve African debt market liquidity and transparency. The new {BADBC Index} is the capped version of the African Bond Index (ABABI) with a maximum exposure of 25% per country, while 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.
  • According to its Finance Minister, Egypt will sell EUR 1bn to EUR 1.5bn of Euro-denominated debt in an effort to curb budget deficit and boost foreign reserves. It is worth noting that Egypt has concluded the sale of USD 4bn in Eurobonds this week in 5Y, 10Y and 30Y tenors at respectively 5.58%, 6.59% and 7.9%. This issuance attracted USD 12bn worth of bids. (Source: Bloomberg).
  • Moody’s has downgraded Kenya’s rating from B1 to B2 while the outlook has been set as stable. The main reasons of this downgrade are the country’s fiscal deficit.  This downgrade comes at a time where authorities are embarking on a roadshow to promote a new Eurobond to raise at least USD 1.5bn (Source: Reuters).
  • In Nigeria, the Federal Government will offer for subscription by auction NGN 100 bn worth of bonds in its February 21 auction. The Debt Management Office will sell NGN of a bond maturing in July 2021 at a rate of 14.5% and NGN 50bn of another bond maturing in February 2028 (source:www.premiumtimesng.com)
  • Nigeria has opened books on a dual tranche US dollar offering. The country is marketing a benchmark sized February 2030 bond at Treasuries plus 450bps and a benchmark February 2038 note at Treasuries plus 487.5bps (Source: Reuters).

Currencies

Source: Bloomberg®

AfDB/AFMI℠ Bloomberg® African Bond Index (ABABI) 25% Capped

The ABABI 25% Capped is a rule - based weighted composite index of local Sovereign Indices (South Africa, Egypt, Nigeria, Kenya, Namibia, Botswana, Ghana, and Zambia). County percentage composition to the index is capped at 25 %. To be included in the index, a security must have at least 1 year remaining to maturity. Source: Bloomberg®

Bloomberg Commodity Index

Source: Bloomberg®