Ecobank unveils Africa’s first ever domestic bond index

The Ecobank Group December 8, 2011 launched the first-ever benchmark index to measure the performance of domestic bond markets in sub-Saharan Africa excluding South Africa.

The index known as the Middle Africa Bond Index (MABI), according to Ecobank, fills a notable gap given that, previously, there was no such index dedicated to sovereign local currency denominated debt in sub-Saharan Africa.

The 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 sub-Saharan Africa, the Togo-based lender said in a statement after Paul-Harry Aithnard, Group Head of Research, announced the launch whilst addressing an audience of corporate executives and financiers attending an African Capital Markets Conference in London December 7, 2011.

“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 bank said.

Ecobank noted that MABI currently consists of sovereign bonds from Benin, Côte d’Ivoire, Senegal, Togo, Ghana, Kenya and Nigeria, with a further seven 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 stated.

By Ekow Quandzie