Nigeria’s 2024 bond will be included in JP Morgan’s Government Bond Index-Emerging Markets on August 29, in addition to three other bonds already listed, a JP Morgan internal document released last week.
JP Morgan added Nigeria to its local currency government bond index in 2012, making it the second African country after South Africa to be included in a widely followed index, thanks to its improving liquidity levels.
Nigerian bond yields fell across maturities on the index announcement, with the benchmark 10-year bond yield slipping 22 basis points on Thursday’s trade to 11.97 per cent, according to a Reuters report.
“The inclusion should not have a substantial effect on the long end, although it was probably a catalyst for today’s rally in the market,” the Head of Africa Strategy at Standard Chartered Bank, Samir Gadio, said.
JP Morgan added Nigeria’s 2014, 2019 and 2022 bonds in October 2012, attracting up to $1.5bn in portfolio inflows and raising the profile of the economy among offshore investors.
JP Morgan valued Nigeria’s outstanding bond issues on its index at $13.75bn, according to the document.
Foreign bond holding has since surged to $4.5bn, according to analysts at Standard Chartered Bank.
The 2024 addition will increase Nigeria’s weighting in the bond index to 1.83 per cent at the end of August, from 1.65 per cent, the JP Morgan document showed.