The African Development Bank (AfDB) announced on Thursday it collaborated with Bloomberg on the Launch of AFMISM Bloomberg an African Bond Index, through the African Financial Markets Initiative (AFMI). Calculated by Bloomberg Indexes, this composite index is comprised of the Bloomberg South Africa, Egypt, Nigeria and Kenya local currency sovereign indices. "The launch of the indices comes as a welcome development at a time when African countries are increasingly looking to domestic capital markets to source much needed financing for economic development," says Stefan Nalletamby, the Director of the Financial Sector Development Department of the AfDB. The current index includes an African sovereign bond index comprised of the four most liquid bonds in Africa and three sub-indexes for different maturity ranges. To be included in the index, a security must have at least one year remaining to maturity and withstand price stability tests. Further liquid markets are expected to be added to the index this year, according to Bloomberg. David Tamburelli, Head of Emerging Markets Product, Bloomberg L.P. said there is a clear need for a transparent and objective benchmark for sovereign debt in Africa. He added that well-crafted indices are essential in the assessment of value in markets while contributing to liquidity by giving investors a benchmark to evaluate their performance.
