FTSE Russell to Add Indian and South Korean Bonds to Flagship Indexes in 2025
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Global index provider FTSE Russell announced on Tuesday that it will include Indian sovereign bonds in its Emerging Markets Government Bond Index (EMGBI) and South Korean government bonds in its World Government Bond Index (WGBI), both starting in 2025.
The decision to include Indian securities, which will represent 9.35% of the EMGBI on a market-value weighted basis, comes after a three-year period on the index provider's watch list. This follows similar moves by JPMorgan and Bloomberg Index Services, who announced the addition of Indian government bonds to their respective emerging market debt indexes earlier this year.
According to FTSE Russell, the market value of the EMGBI is $4.7 trillion. This inclusion is expected to attract billions of dollars in foreign investment into Indian bonds, mirroring the nearly $18.5 billion inflow observed since the announcement of inclusion into the JPMorgan Emerging Market index in September 2023.
Madhavi Arora, chief economist at Emkay Global Financial Services, told Reuters that the inclusion "is sentiment positive and will strengthen the demand side of India bonds structurally."
South Korean government bonds, which have been on FTSE Russell's watch list for the past two years, will constitute 2.22% of the WGBI on a market value-weighted basis.
The inclusion of both Indian and South Korean bonds in FTSE Russell's flagship indexes signifies growing confidence in these economies and their respective bond markets.
This news was first reported by Reuters on 8 October 2024.