(Bloomberg) -- The hunt for yield is taking investors such as M&G Investment to the world's least developed region -- sub-Saharan Africa.
Countries that 10 years ago didn't exist in the international bond market are now reaching out to global investors. South Africa became the region's first dollar bond issuer in the 1990s, and in the past decade they have been joined by other sovereigns including Rwanda, Ghana and Cameroon. Most recently, Ivory Coast sold $1.25 billion of 16-year notes alongside a €625 million ($729 million) 8-year bond.
African bonds yield 12 percent on average, according to the AFMI Bloomberg African Bond Index -- much higher than the Bloomberg USD Emerging Market Sovereign Bond Index's 4.4 percent.
“We have overweight in sub-Saharan Africa,” said Pierre Chartres, a retail fixed-interest investment director at M&G Investment. “These countries are under researched by other funds -- so they are to our advantage.”
--With assistance from Allen Yan
To contact the reporter on this story: Narae Kim in Hong Kong at nkim132@bloomberg.net.
To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Colin Simpson, Ravil Shirodkar
©2017 Bloomberg L.P.
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