News from the frontier: Africa leads emerging market bond revival

Send us Fan Mail◆ Outsiders open EM investors’ wallets ◆ European banks let their hair down in dollar market, still shy in euros ◆ Digital innovation in Frankfurt with DZ BankAngola and African telecom company Helios Towers were hardly the issuers anyone expected to restart bond issuance from central and eastern Europe, the Middle East and Africa.The Middle East war stopped all sales for three weeks, and bankers were looking for a mainstream, investment grade issuer to reopen the market.But this week it was speculative grade African borrowers — as well as the Serbian republic within Bosnia-Herzegovina — that performed that duty, with successful deals that showed emerging market bond investors are willing to buy.Although the three issuers were all from the risky end of the spectrum, they are protected from the war’s effects. Whether investors are willing to steer closer to the Gulf’s woes will be tested in the coming weeks.Another restart happened in euro bonds for European financial institutions. The market has been bare of new issues all month. For a variety of reasons European banks have avoided their home market. Dealmaking picked up this week, with Bank of Ireland showing the way in euros — but most of the action was still in dollars.Frankfurt is an important node on Europe’s capital market blockchain network, and this week Matthias Bergner, DZ Bank’s group treasurer, joins the podcast to discuss DZ’s latest pilot digital bond, sold to KfW. DZ reckons it is the first bond in which the full lifecycle is on chain.Digitalising the bond market - sponsored interview with KfWIn an interview on the GlobalCapital podcast this week, KfW's Tim Meirer and Bert Staufenbiel discuss how to move to the next stage in introducing distributed ledger technology to the bond market. They are convinced it can save time, friction, cost and risk.Interoperability of systems all along the value chain is central to the effort. Meirer and Staufenbiel highlight four essential avenues for progress: open standards, public-private partnerships, modular designs and continuous dialogue.