News and developments on African capital markets, includes: African securities, African stock exchanges/stock markets, African equities, African bonds, African private equity/venture capital, and African social impact investment
Zambia went to the global market yesterday (13 September) with its first eurobond, a USD750 million 10-year bond priced at a 5.625%. It will be used to fund its budget and invest in infrastructure and the issue highlights “great appetite” for African credit.
A new securities exchange in Lusaka, BaDEx (Bonds and Derivatives Exchange Zambia) is installing tried-and-tested bond and derivative trading software from South Africa’s STT Software, which supplies the JSE, and says it will be ready to launch operations next month, May 2012. BaDEx trading platforms will include spot and derivative trading in bonds, currency, commodities (such as derivatives on metals and silo certificates on the spot market) and a variety of other derivatives including agricultural commodities, precious metals, equity and energy.
2012 could be an active year for African bonds and particularly eurobonds, judging by the 5.5 times oversubscription for the Namibia’s debut $500 million, 10-year Eurobond. However, timing and terms of issues will be crucial in the turbulent markets.
Fitch Ratings agency has given Zambia a “B+” rating on long-term foreign and local currency, with a stable outlook, which could pave the way for a $500 million Eurobond, according to Standard Bank, but the country has plenty of local deposits seeking homes as local interest rates are attractive and the currency that looks strong.