Sovereign Bond Spreads Widening

The spread of sub-Saharan African (SSA) US$ Global 2017 treasury bonds over US 10-year treasury bonds has widened significantly throughout September as global risk aversion rises. While we believe SSA equities are insulated from international financial market ructions to a greater extent than most other countries, they are by no means completely decoupled. In the short-to-medium term, foreign portfolio flows and international credit can dry up, while, in the longer term, diminished FDI and falling commodity prices can significantly impact the real economies of SSA economies.

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