JPMorgan has restored Nigeria and 25 other emerging-market economies to its local-currency government bond index after an 11-year hiatus, potentially improving the country’s access to global fixed-income investors.
The development follows Nigeria’s inclusion in the GBI-EM Edge, where its eligible government bonds carry a 7.40 per cent index weight, alongside other emerging-market economies.
According to a pictorial view released by the US-based banking giant on Monday, Nigeria is listed among countries eligible for inclusion in the Government Bond Index-Emerging Markets (GBI-EM) Edge, a benchmark that tracks local-currency government bonds issued by emerging-market countries.
Under the index composition, Nigeria has 16 eligible instruments, with an outstanding market value of about $17.465 billion and a yield to maturity of 17.1 per cent.
The Nigerian securities also have a duration of 3.38 years, while the country’s credit rating is listed as B- in the JPMorgan document.
Nigeria’s 7.40 per cent weighting places it among the countries with significant representation in the index, alongside economies including Vietnam, Egypt, Morocco, Pakistan, Bangladesh and Kazakhstan, which each have an 8 per cent weight.
The index provides international investors with a benchmark for assessing and gaining exposure to government securities issued in the currencies of emerging economies.
The development could increase the visibility of Nigerian government securities among international asset managers and institutional investors that use JPMorgan’s emerging-market bond indices as benchmarks for portfolio allocation.
Nigeria’s return to the index comes against the backdrop of efforts to deepen the country’s domestic capital market, attract foreign investment and improve the participation of international investors in naira-denominated government securities.