The Stock Exchange of Mauritius (SEM) on September 19, launched the first Pan-African Sovereign Bond Exchange Traded Fund (ETF) known as the African Domestic Bond Fund (ADBF).
ADBF, which is managed by MCB Investment Management Co. Ltd, is a USD-denominated ETF, structured as an open-ended Collective Investment Scheme that seeks to replicate the AfDB/AFMI Bloomberg African Bond Index 25% Capped.
The ETF invests in African currency denominated debt obligations issued or guaranteed by an African Government, and will initially comprise debt obligations from South Africa, Egypt, Nigeria, Kenya, Namibia, Botswana, Ghana and Zambia.
ADBF is the result of a partnership between the AfDB, which has committed a total investment of USD 25 million to the fund, and MCB Investment Management Co. Ltd, a subsidiary of MCB Capital Markets, with the aim of promoting the development of local financial markets throughout the African continent.
ADBF constitutes a new product offering which provides investors with a broad exposure to African sovereign debt securities. The listing of ADBF on SEM confirms the attractiveness of the Exchange as a multi-currency (USD, Euro, GBP, ZAR and MUR) capital-raising, listing and trading platform for African issuers. This listing is also in line with SEM’s internationalisation strategy and its multi-asset class focus.
Stefan Luis Nalletamby, Director of African Development Bank Group:
“The launch of ADBF shows the African Development Bank’s commitment to supporting innovative solutions that will render capital markets more attractive to both African domestic and international investors. This fund is part of the Bank’s effort to help catalyse and mobilise African domestic resources through our domestic capital markets in order to further strengthen Africa’s financial sustainability. We are extremely happy to see the enthusiasm and support we are receiving from institutional and retail investors.”
Rony Lam, CEO of MCB Capital Markets said: “MCB Capital Markets is a pioneer in the pan-African fixed income investment universe and is proud to provide global investors with easy access to this asset class through a liquid and cost-effective vehicle.”
ADBF, he said, attests to MCB’s commitment to the development of local currency debt markets in Africa, the quality of our investment management capabilities and the attractiveness of SEM as a listing venue for specialist Africa focused investment products.
Sunil Benimadhu, Chief Executive of Stock Exchange of Mauritius said: “The SEM welcomes the listing of the first Pan-African Sovereign Bond ETF on its platform. We would like to thank the African Development Bank and MCB Capital Markets for choosing the SEM as a listing venue for this innovative product.”
He said that the listing of ADBF constitutes an important milestone in the positioning process of the SEM as an attractive multi-asset class international Exchange which is today recognised as a compelling platform for the listing and trading of a growing variety of products from African issuers.