JPMorgan Chase & Co. is considering adding Nigerian domestic bonds to its government bond emerging market index series on Oct. 1, according to a note from the bank obtained by Bloomberg.
The inclusion would be phased over three months, according to the note that was sent to clients. The GBI-EM Index series may include government debt maturing in 2014, 2019 and 2022 as they are the country’s most liquid bonds, according to the note. Sarah Stipicevic, a spokeswoman for JPMorgan in New York, declined to comment when contacted by phone.
“Market conditions may change from now until the primary inclusion date,” the note said. “In which case, this list may be subject to change.”
Nigeria, Africa’s biggest oil producer, has been seeking inclusion into emerging-market indexes to increase portfolio flows into the nation’s capital markets. Securities and Exchange Commission Director General Arunma Oteh said in an interview in October that she was planning to discuss the inclusion with index providers such as JPMorgan and Morgan Stanley.
Yields on Nigeria’s 16.39 percent notes due 2022 dropped 36 basis points today, or 0.36 percentage points, to 16 percent, according to prices on the Financial Markets Dealers Association website.
Nigeria’s total domestic debt rose 18 percent to $39 billion at the end of June from a year earlier, according to the Debt Management Office in the capital Abuja. Finance Minister Ngozi Okonjo-Iweala said on Aug. 8 that the government wants to reduce domestic borrowing.
The naira has risen 3.2 percent to 157.2 a dollar this year, making it Africa’s second best performing currency in 2012. The nation’s benchmark Bonny Light crude blend has advanced 27 percent from a 2012 low in June.