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Thursday, January 24, 2019
JP Morgan Index to readmit Nigeria’s sovereign bond in 9-months’ time

JP Morgan Index to readmit Nigeria’s sovereign bond in 9-months’ time


Information from the FMDQ OTC Exchange Leaders’ meeting currently holding in London have shown that Nigeria won’t be making it back to JP Morgan emerging market index anytime soon.

This conclusion was arrived at after a meeting with Senior Analysts from JP Morgan.

Analysts from the global investment banker stated that: “JP Morgan worked with Nigeria over a period of nine months, leading up to actions taken on September 8, 2015, and it is our expectation that it will take about the same time working with Nigerian officials to bring the country back to the index.”

Also, the relative liquidity offered by the new investors’ and exporters FX window by the Central Bank of Nigeria (CBN) has been attracting back to the country’s debt instruments.  The IEFX window created in May, 2017.

Nigeria was listed on the JP Morgan Emerging Market Index in October 2012. She was the second African country afterSouth Africa to be listed on the index, before removal in October 2015.

This index tracks yields on government bonds of emerging countries, which met the requirements of foreign investors holding the government bond for at least one year before exiting.

Following Nigeria‘s FX crisis and capital control measures, the firm issued a statement on September 9, 2015, indicating that it had begun the process of removing Nigeria from its index. A process which was completed in October 2015.

It is believed that removing Nigeria from this elite index resulted in several institutional investors deposing Nigerian sovereign bonds which triggered unprecedented capital outflow, increased borrowing cost for the government and created foreign investors’ panic which threatens the Nigeria’s capital market.

Noting the ease in the country’s FX market and near the convergence of FX rates in the country, it is hoped that country would be readmitted by back JP Morgan.

A Senior Analyst at the Bank stated that“where ever we go, we are not hearing investors ask us why is Nigeria not bank and there is little chance of any major changes until investors themselves begin to push.”


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