AFMI Weekly Insight February 22nd 2019

22 February 2019


Bonds

Egypt’s $4 billion Eurobond 5X over subscribed - Egypt’s $4 billion Eurobond issued on February 19, 2019 to fund its budget deficit, was 5X oversubscribed, according to a release published by the finance ministry. The same source reveals that the subscription to that operation reached $21.5 billion. It also indicated that the issuance was divided into three tranches; a first 5-year $750 million tranche with 6.2% yield, a 10-year $1.75 billion with 7.6% yield and a 30-year $1.5 billion tranche with 8.7% yield. (Source: ecofinagency.com)

Rwanda issues 7-year Treasury bond worth Rwf15 billion - Rwanda’s Government has yet again turned to the local debt market in order to raise money to fund its infrastructure project - critical for easing doing business and propelling economic development. Through the National Bank of Rwanda (BNR), government  issued seven-year Treasury bond worth Rwf15 billion - also meant to support the development of the local capital market. (Source: allafrica.com)

Currency & Monetary Policy 

Tunisia’s Central Bank raises Interest rate by 100 bps to 7.755 - Tunisia’s central bank raised its key interest rate to 7.75 percent on Tuesday, from 6.75 percent, to curb inflation, the third such hike in the past 12 months. It last raised the rate by 100 basis points in May. Tunisia’s inflation rate has come down from 7.5 percent in December and had reached 7.8 percent last June, the highest since 1990. The dinar has slumped as a worsening trade deficit has eroded Tunisia’s foreign currency reserves, which now cover only about 85 days’ worth of imports. (Source: af.reuters.com

Zambia Monetary Policy Decision- interest rate held steady at 9.75% - Zambia’s central bank held its key interest rate at a five-year low as pressures on foreign reserves persist in Africa’s second-biggest copper producer. The Bank of Zambia maintained the rate at 9.75%. It is the fourth straight meeting at which the rate has been held. (Source: Bloomberg.com/africa)

Ratings

Namibia’s rating outlook revised - Fitch Ratings has revised the outlook on Namibia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to Negative from stable, and affirmed the IDR at ‘BB+’. (Source: Bloomberg.com/africa)

Borrowings

Kenya Green Bond Program - Kenya set the stage for the country’s first green bond with new rules on Wednesday, part of efforts to diversify its capital markets. Like other African nations, Kenya needs to raise billions of dollars to invest in infrastructure projects including roads, water and irrigation, railways and power generation. (Source: af.reuters.com

Kenya’s M-Akiba restarts - The National Treasury has said it will re-open the sale of the mobile-based infrastructure bond M-Akiba on Monday, hoping to attract more takers after the low interest in 2017. The sale will start on Monday, February 25 and runs up to March 8, with the Treasury targeting Sh250 million during this period. The reopening will see investors once again offered 10 percent in interest. The bond targets investors who can put in as low as Sh3,000 via their mobile phones then lock it in for a period of three years. They then earn interest after every six months and principal amount upon reaching maturity date. (Source: businessdailyafrica.com)

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®

BADBC chart

African Domestic Bond Fund

Source:  Bloomberg®

ADBF chart
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