Foreigners Pile Into Zambian Bonds After Auction Rules Eased

Foreigners have piled into Zambia’s local bond market following the government’s move to lift a cap on non-resident participation in debt auctions, as money shifts from dollar-denominated assets into higher-yielding investments.

Foreign investors accounted for 49% of purchases since Zambian authorities increased the limit on non-resident participation to 23% last month from 5%, according to Bank of Zambia Governor Denny Kalyalya. The government sold 9.3 billion kwacha ($486 million) of bonds on Jan. 23, with investors placing orders for more than twice the initial amount of 4.2 billion kwacha on offer, according to the central bank.