The African Domestic Bond Fund (ADBF) of the Mauritius Commercial Bank has been given permission to list on the Botswana Stock Exchange (BSE). The Exchange Traded Fund (ETF) ADBF was introduced in September 2018 and is initially listed on the Stock Exchange of Mauritius, denominated in U.S. dollars. The fund is managed by MCB Investment Management, the asset management division of MCB Group. The African Development Bank is a major backer and supporter of ADBF.
The primary goal of the fund is to provide investors with a transparent, cost-effective, and liquid vehicle to gain exposure to Pan-African local currency government bonds, thereby fostering the growth of local currency capital markets in Africa.
The fund’s primary purpose is to promote the development of local currency capital markets in Africa by giving investors access to Pan-African local currency government bonds through a transparent, cost-effective, and liquid vehicle.
In August of 2022, the market capitalization of African local currency debt surpassed $1 trillion, making it one of the fastest-growing asset classes in the world. The asset class has outperformed its global fixed-income peers over a one-year, three-year, and five-year time horizon in terms of USD total return, including US Treasuries, US Investment Grade Bonds, US High Yield, and USD Emerging Markets. As of August 31st, 2022, the fund’s cumulative USD total return was 27.6%, and its BWP return was 51.6%.
“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,” said Stefan Nalletamby, director of the Financial Sector Development Department at the African Development Bank. We believe this listing is in keeping with our mission to expand the use of capital market products throughout our Regional Member Countries.
“The secondary listing of the ADBF on the BSE is another important milestone in the evolution of the fund,” said Rony Lam, CEO – of MCB Capital Markets. We expect increased interest in the African local currency fixed-income asset class as a result of the ADBF’s strong performance track record and dual listing.
“We are excited with our first cross-listing across African exchanges for the ADBF and recognize and appreciate the hard work and dedication by various teams in bringing this to fruition,” said Abhimanyu Yadav, Head of Fixed Income and Currencies at MCB Capital Markets. This is a major success that reflects the AfDB’s and our joint efforts to open up Africa’s financial markets to foreign investors and foster growth in the continent’s economy.
