AFMI Weekly Insight January 18th 2019

18 January 2019


Bonds

Egypt plans to issue $2 billion of samourai bonds, Reuters reported on January 13, 2019, citing official sources. Samourai bonds are yen-denominated bonds issued by foreign countries to big Japanese investors. Sources cited by Reuters indicated that the Samourai bonds are part of a large euro-bond issuance programme ($7 billion).
(Source: Ecofin Agency)

WAEMU: This year, the eight countries of the West African Economic and Monetary Union (WAEMU) plan to issue XOF2,723 billion ($4.82 billion) in the debt market against XOF2,433 billion in 2018, the regional debt planning agency, UMOA-Titres, announced on January 12, 2019. (Source: african-markets.com)

Currency & Monetary Policy 

Zimbabwe will introduce a new currency in the next 12 months, the Finance Minister said, as a shortage of US dollars has plunged the financial system into disarray and forced businesses to close. In the past two months, the southern African nation has suffered acute shortages of imported goods, including fuel whose price was increased by 150 percent on Saturday. (Source: african-markets.com)

Mozambique's central bank lowered its monetary policy rate for the ninth time as inflation continues to decelerate, the economy slowly recovers and the exchange rate slowly depreciates. The Bank of Mozambique cut its monetary policy rate (MIMO) by another 75 basis points to 14.25 percent and has now cut it by 900 basis points since April 2017, including 525 points this year. In addition to cutting MIMO, the central bank said its CPMO, the bank's body responsible for monetary policy, also lowered the deposit rate and the marginal lending facility rate by 75 basis points to 11.25 percent and 17.25 percent, respectively. (Source: african-markets.com)

Borrowings

Africa: The African Development Bank’s Board has approved the institution’s 2019 borrowing program to the tune of US$7.24 billion from capital markets. The Bank accesses a wide array of capital markets with the majority of its borrowing in US dollars and Euros as well as issuances in other public markets such as Australian dollars and Pound sterling. (Source: AfDB)

Currencies

Source: Bloomberg®

Currencies chart

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®

Bond Index chart

African Domestic Bond Fund

Source:  Bloomberg®

ADBF chart
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