JP Morgan to delist 50% of Nigerian bonds today


Just as it threatened some weeks ago, JP Morgan would today, as a first step, remove half of Nigerian sovereign bonds from its Emerging Markets Global Bond Index (GBI-EM).

The remaining would follow next month, according to Reuters, quoting the U.S. bank on Tuesday. The decision which was blamed on lack of liquidity and currency restriction means investment funds tracking the index would sell their Nigerian bond holdings, adding to upward pressure on national borrowing costs at a time when there is already a sharp drop in oil revenues.

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The bank said the removal, part of its month-end index rebalancing, would cut Nigeria\’s weight to 0.79 per cent, raising the weight of Brazil and South Africa by 0.80 per cent and 0.20 per cent respectively.

Responding to the decision by JP Morgan to delist Nigerian sovereign instruments, the Federal Ministry of Finance, Central Bank of Nigeria (CBN) and the Debt Management Office, had in a joint statement argued that they had worked assiduously to correct all lapses noted by the investors, such as putting in place a functional two way FX market, which now exists in Nigeria.

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