The African Domestic Bond Fund (ADBF), an exchange-traded fund, has been listed in the local Pula currency on the Botswana Stock Exchange (BSE).
The listing, on 15 September 2022, follows the Fund’s primary U.S. dollar listing on the Mauritius Stock Exchange in 2018. The Pula-denominated listing will offer investors an innovative tool to gain exposure to African local currency fixed income.
ADBF is the first multinational fixed income exchange-traded fund in Africa. It was launched by the African Development Bank as part of initiatives 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 Fund replicates the African Development Bank Bloomberg African Bond Indices (ABABI), a family of bond indices that tracks 10 countries and represents roughly 90% of the total stock of outstanding African local-currency bonds.
ABABI, administered by the Bank and calculated by Bloomberg, was developed to improve liquidity in local capital markets and serve as a benchmark for investors in African local currency. The indices also provide a strategic tool to improve the market infrastructure of the African bond markets.
Stefan Nalletamby, Director of the African Development Bank’s Financial Sector Development Department, said: “This listing on the BSE is a very positive development as the local asset status of the Fund will enable Botswana’s institutional investors to invest in the Fund as part of their domestic allocations. This listing aligns with our mandate to develop capital markets products across our Regional Member Countries.”
The African Domestic Bond Fund provides compelling opportunities from both an investment and development point of view, said Ahmed Attout, Manager of the Bank’s Capital Markets Development Division. He said the African Development Bank had not only conceptualized the Fund but is also investing up to $25 million in it as a sign of commitment to the initiative.
The Africa Development Bank works to deepen Africa’s local currency bond markets and create an environment where African countries can access long-term financing.