AFMI Weekly Insight January 25th 2019

25 January 2019


Currency & Monetary Policy 

Nigeria’s Central Bank held its policy rate at 14% on Jan. 22nd.  (Source: Bloomberg)

Ghana is offering higher rates on its three-month bills to attract local investors and support the currency amid concern about capital flight as developed-nation central banks tighten policy, according to SAS Finance Group. The yield on 91-day Treasury bills (14.7%), which climbed to the highest in nine months at the last sale on January 18, will probably rise even further as the authorities look for ways to make cedi assets more attractive to investors. Yields on the securities have been increasing since the fourth quarter of 2018. The cedi weakened 8.4 percent against the dollar last year, though it has stabilized after reaching a record low on December 19th. (Source: Bloomberg)

The South African Reserve Bank lowered its 2019 inflation forecast to 4.8 percent from a previous estimate of 5.5 percent largely due to lower assumed oil prices. Its price-growth forecast assumes an average oil price of $62 per barrel in 2019. The bank’s Monetary Policy Committee voted to hold the key rate at 6.75 percent last week. (Source: Bloomberg)
 

Borrowings

Kenya appointed Trade and Development Bank and Standard Bank Group Ltd. to arrange syndicated loans of $1 billion. There will be three tranches -- a $250 million 10-year debt and two seven-year loans of $410 million and 300 million euros ($340 million).

Kenya’s Treasury planned to raise about 280 billion shillings ($2.8 billion) of external debt to help plug the 2018-19 budget shortfall.  The government is talking to banks separately to arrange a $2.5 billion Eurobond-offering, probably during the first quarter, Reuters reported on Wednesday. (Source: Bloomberg)

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®

Bond Index chart
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