Oil rise makes Gabon bonds emerging market's most profitable

Accra - Gabon’s bonds this month have returned more than any other dollar-denominated sovereign notes in emerging markets.

The nation’s $1.5bn bonds due December 2024 advanced as oil, which accounted for more than a third of government revenue last year, rose above $55 a barrel for the first time in about 17 months.

Brent crude prices have risen 18% since Opec members agreed to trim output for the first time in eight years.

"If oil goes towards the $60 level, then that would help solve the macro context," and the firm would consider amending its sell recommendation on the bonds, Stuart Culverhouse said, the chief economist at Exotic Partners who downgraded his outlook on Mozambique’s debt less than two weeks before they plunged in October.

Gabon’s 6.375% bonds have returned 6.2%

 in December. The yield has fallen 95 basis points, poised for the steepest monthly drop since April 2015, to 7.6% on Wednesday.