First multijurisdictional fixed income Exchange Traded Fund (ETF) on the continent
Listing on Mauritius Stock Exchange on 18 September 2018. Investors benefit from convenient access to African government bonds
The African Development Bank 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 USD$ 25 million.
ADBF will track the performance of the AfDB/AFMISM Bloomberg® African Bond Index 25% 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.
"We are delighted to partner with the African Development Bank in launching this pioneering fund. This attests to the Bank and MCB's commitment to help develop the local currency fixed income markets on the continent and to the quality of our investment management capabilities," Pierre-Guy Noel, Chief Executive Officer, MCB Group, said at the launch ceremony. "The fund listing on the Stock Exchange of Mauritius brings to investors the opportunity to access African government bonds conveniently," he added.
Bank Director for Financial Sector Development, Stefan Nalletamby, also expressed satisfaction with the upcoming listing.
"The African Development Bank is pleased to launch the African Domestic Bond Fund as we have designed and structured this product and are acting as an anchor investor. This shows our commitment to support the development of and investment in long-term financial instruments issued in our local financial markets," Nalletamby, said.
About MCB Capital Markets
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.
About MCB Investment Management
MCB Investment Management (MCBIM) is a wholly-owned subsidiary of MCB Capital Markets, the investment banking and asset management arm of MCB Group, the largest banking group in Mauritius. MCBIM manages assets on behalf of a range of institutional investors including pension funds, corporates, insurance companies and other types of financial institutions. The company has dedicated Fixed Income and Equities teams and is increasingly recognized in the industry for its Africa focused investment strategies.
