African Dollar Bonds Extend Rebound as Investors Bet on Oil Boon

African dollar bonds extended a recovery on Thursday as investors bet some of the region’s borrowers will benefit from elevated oil and metal prices even as the war in the Middle East saps risk appetite.

The premium of African dollar bonds over US Treasuries narrowed about seven basis points to 339, according to indicative pricing for JPMorgan Chase & Co. indexes. The spread is tightening for a second day after jumping the most since October on Tuesday. Dollar securities from oil-producing countries led gains, with the yield on Angola’s 2048 bonds falling 4 basis points to 10.56% as of 8:38 a.m in London.