AfDB and MCB launch African Domestic Bond Fund

bond 18The ADBF arose out of the Bank’s African Financial Markets Initiative (AFMI), which aims to strengthen African economies by reducing their dependency on foreign currency. (Image source: Roo Reynolds/Flickr)The African Development Bank (AfDB) and Mauritius Commercial Bank Group (MCB) have launched the African Domestic Bond Fund (ADBF) ahead of its listing on the Stock Exchange of Mauritius Ltd on 18 September 2018

It is the first multijurisdictional fixed income Exchange Traded Fund (ETF) on the continent.

The ADBF arose out of the Bank’s African Financial Markets Initiative (AFMI), which aims to strengthen African economies by reducing their dependency on foreign currency denominated debt, increasing the range of available financing options, and acting as a catalyst for regional market integration. The Bank is acting as an anchor investor of ADBF, to which it has committed US$25mn.

ADBF will track the performance of the AfDB/AFMISM Bloomberg® African Bond Index 25 per cent Capped, an index that comprises African local currency sovereign bonds of eight African markets, namely Botswana, Egypt, Kenya, Namibia, Nigeria, South Africa, Ghana and Zambia. It is intended that sovereign bonds of other countries will be included in the index over time.

MCB Investment Management Co Ltd (MCBIM), a subsidiary of MCB Capital Markets, has been appointed as Fund Manager for the ADBF. MCBIM pioneered investing in the pan African fixed income asset class in 2014, when it launched the MCB Africa Bond Fund, an actively managed mutual fund focused on African fixed income. This fund has consistently outperformed its benchmark.

MCBIM’s Fixed Income team is led by Abhimanyu Yadav, who has had a key role in positioning MCBIM as a leading Africa focused asset manager, having worked in various roles in the asset management industry in Asia, Europe, North America and Africa.

MCB Capital Markets is the investment banking and asset management arm of MCB Group, the largest banking group in Mauritius. The company provides a broad range of services under one roof, including corporate finance advice, asset management, stockbroking, private equity, structured products and registry services. Based in Mauritius, the team works with clients wishing to start or grow their operations in Africa and helps them develop solutions that meet their financing, strategic and investment objectives.

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