Nigeria’s 2024 bond to be added to JP Morgan bond index on Aug. 29

Nigeria’s 2024 bond will be included in JP Morgan’s Government Bond Index-Emerging Markets (GBI-EM) on August 29, in addition to three other bonds already listed, a JP Morgan internal document released on Thursday showed.
JP Morgan added Nigeria to its local currency government bond index in 2012, making it the second African country after South Africa to be included in a widely followed index thanks to its improving liquidity levels.
Nigerian bond yields fell across maturities on the index announcement, with the benchmark 10-year bond yield slipping 22 basis points on Thursday’s trade to 11.97 percent.
“The inclusion should not have a substantial effect on the long end, although it was probably a catalyst for today’s rally in the market,” said Samir Gadio, head of Africa strategy at Standard Chartered Bank.
JP Morgan added Nigeria’s 2014, 2019 and 2022 bonds in October 2012, attracting up to $1.5 billion in portfolio inflows and raising the profile of Africa’s biggest economy among offshore investors.
JP Morgan valued Nigeria’s outstanding bond issues on its index at $13.75 billion, according to the document.
Foreign bond holding has since surged to $4.5 billion, according to analysts at Standard Chartered Bank.
The 2024 addition will increase Nigeria’s weighting in the bond index to 1.83 percent at the end of August, from 1.65 percent, the JP Morgan document showed. 
Source: Reuters

Leave a Reply

Your email address will not be published. Required fields are marked *