Secondary Market — Trading Bonds on BODIVA
After government securities are issued in the primary market, they trade on the secondary market operated by BODIVA (Bolsa de Divida e Valores de Angola). BODIVA handles both equity and debt trading and recorded 10,328 transactions in 2024, reflecting the gradual maturation of Angola’s capital markets infrastructure.
How Secondary Trading Works
BODIVA operates an electronic order-matching system for government securities. Trading follows a continuous auction model during market hours, with all transactions settled through CEVAMA, the central securities depository.
| Parameter | Detail |
|---|---|
| Trading hours | 09:00 – 15:00 (Luanda time) |
| Settlement cycle | T+2 for OTs, T+1 for BTs |
| Trading currency | Angolan Kwanza (AOA) |
| Price quotation | OTs quoted as % of par; BTs quoted on yield basis |
| Minimum lot | AOA 100,000 |
| Clearing house | CEVAMA |
Market Participants
Secondary market activity is dominated by a relatively concentrated group of participants:
- Commercial banks — The largest holders and most active traders of government securities, accounting for the majority of secondary market volume. Banks use government bonds for liquidity management and as collateral for BNA repo operations.
- Pension funds and insurers — Typically buy-and-hold investors who occasionally trade to rebalance portfolios or manage duration.
- Foreign institutional investors — A growing but still small segment, subject to the regulatory framework established under Aviso 15/19 (see foreign holders analysis).
- Retail investors — Can access the secondary market through licensed brokers, though most retail participation occurs in the primary market via the Portal do Investidor.
Liquidity Constraints
Liquidity remains the primary challenge for Angola’s secondary bond market. Several structural factors contribute:
- Buy-and-hold dominance — Banks hold government securities to maturity for yield or regulatory purposes, reducing the tradeable float.
- Concentrated ownership — A small number of large banks hold a disproportionate share of outstanding government debt, limiting the diversity of trading counterparties.
- Bid-ask spreads — Spreads on kwanza-denominated bonds typically range from 50 to 200 basis points, significantly wider than in more developed frontier markets. USD-indexed OTX bonds tend to have tighter spreads due to higher institutional demand.
- Intermittent trading — Many individual bond series may go days or weeks without a single trade, making mark-to-market valuation challenging for portfolio managers.
Pricing and Yield Discovery
In the absence of continuous trading for many series, secondary market pricing relies on a combination of sources:
- BODIVA reference prices — Published daily based on available transactions and dealer quotes.
- Primary auction results — The most recent auction cut-off yields serve as benchmarks for secondary market pricing.
- BNA repo rates — The central bank’s repo and reverse-repo operations provide an anchor for short-end pricing.
Current kwanza bond yields trade in the 18-22% range on the secondary market, with shorter-dated BTs closer to the BNA policy rate of 17.5% and longer-dated OTNRs carrying a term premium of 200-400 basis points.
Implications for Investors
The limited secondary market liquidity means investors should generally plan to hold bonds to maturity rather than relying on an exit through secondary trading. For those who need flexibility, shorter-dated BTs offer better liquidity than longer-dated OTs. The buy-and-hold strategy guide and bond ladder approach address how to structure portfolios around these constraints.
For current yield levels across maturities, see the yield curve analysis.