Ecobank launches Middle Africa’s maiden bond index
The Ecobank Group last week, launched the first-ever benchmark index to measure the performance of sub-Saharan African (“SSA”) domestic bond markets (excluding South Africa).
Paul-Harry Aithnard, Group Head of Research at Ecobank, announced the launch of the Ecobank Middle Africa Bond Index (“MABI” or “the Index”) whilst addressing an audience of corporate executives and financiers attending EMEA Finance’s African Capital Markets Conference in London yesterday.
The Ecobank MABI fills a notable gap given that, previously, there was no such index dedicated to sovereign local currency denominated debt in Sub-Saharan Africa.
The Ecobank MABI, developed in partnership with Nedbank Capital,will also enable both institutions to further build on their extensive local market expertise in issuing, managing and trading fixed income securities and local currencies across SSA.
The Index has been developed as a volume weighted benchmark to replicate the underlying performance of selected SSA domestic sovereign bond markets. The weighting formula reflects the influences of changes in GDP indicators, liquidity levels and the regulatory environment and, based on public information sources, provides an objective and largely independent view.The Ecobank MABI currently consists of sovereign bonds from Benin, Côte d’Ivoire, Senegal, Togo, Ghana, Kenya and Nigeria, with a further 8 eight countries being considered for future inclusion.
“Investor appetite for domestic African bonds is increasing as a result both of the Continent’s strong and sustained economic growth prospects and the global search for yield. The Ecobank MABI provides a unique performance benchmark for investors looking to diversify their African fixed income portfolio or to broaden their overall exposure to frontier markets. By providing a highly visible way of measuring returns, the Ecobank MABI is likely to attract more investors to Middle Africa’s bond markets and, ultimately, improve market liquidity,” Paul-Harry Aithnard further observed.
This article was originally posted on Africa Banking Network
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