Barclays may expel Nigeria from global bond index

By 11:16 Fri, 09 Oct 2015 Comments

Barclays will consult with its index users on whether Nigeria’s sovereign debt should remain in its emerging market local currency government bond benchmark, the United Kingdom-based bank has said.

This came barely one month after JP Morgan announced its decision to expel Nigeria from its Global Bond Index-Emerging Market.

Barclays listed the “eligibility of Nigeria for inclusion in the EM Local Currency Government Index” among the primary topics to be considered in its annual review process, according to a statement, though it gave no additional details.

According to Reuters, the Nigerian economy has taken a hammering from the steep drop in oil prices since mid-2014.

An exclusion by Barclays could add to Nigeria’s list of financial problems after a rival index provider, JP Morgan, announced in September it would drop Nigeria from its index, citing a lack of liquidity and currency restrictions.

Barclays said the consultation would run through October and results to be published shortly afterwards.

Nigeria is one of 19 countries, which make up the index and the only one from Africa apart from South Africa.

Barclays said Nigeria’s bonds had a weighting of 1.2 per cent on October 6.

Meanwhile, the Central Bank of Nigeria said on Thursday that it raised N127.07bn ($638.86m) selling Treasury bills with maturities of between three months and one year at lower yields compared with the previous auction.

The CBN sold N25.40bn of the 91-day paper at a yield of 10 per cent, down from 10.50 per cent at the previous sale last month.

It sold N33.49bn worth of six-month paper at a yield of 12.20 per cent, down from 13.39 per cent on September 2, and paid 12.50 per cent to sell N68.18bn of one-year debt less than the 14.69 per cent yield at the previous auction.

Yields were higher than in the secondary market, the three-month paper was trading at 9.13 per cent, six-month debt at 11.69 per cent and the one-year paper at 13 per cent.



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