The inclusion of the IGBs will be staggered over a 10-month period from June 28, 2024 to March 31, 2025, implying an inclusion of 1 percent weightage per month.
A keenly awaited event that could drive billions of dollars worth of inflows into India’s debt market, JPMorgan Chase & Co. will be including Indian government bonds (IGBs) into its benchmark Emerging Market index, starting June 28, 2024.
“India is expected to reach the maximum weight of 10 percent in the Global Diversified index (GBI-EM GD),” according to the JPMorgan note.
The inclusion of the IGBs will be staggered over a 10-month period from June 28, 2024 to March 31, 2025, implying an inclusion of 1 percent weightage per month.
Currently, 23 Indian government bonds (IGBs) with a combined notional value of $330 billion are index eligible, the JPMorgan note said.
The GBI-EM GD accounts for nearly $213 billion of the estimated $236 billion benchmarked into the GBI-EM family of indices.
India was the last big emerging market that had not joined others like China on the global debt indices.
(India’s) index inclusion follows “the Indian government’s introduction of the FAR program in 2020 and substantive market reforms for aiding foreign portfolio investments,” the team led by the firm’s global head of index research, Gloria Kim, said in a statement. Almost three-quarters of benchmark investors surveyed were in favor of India’s inclusion in to the index, they said.
In March, JPMorgan had mentioned that the support for adding India’s index-eligible, high-yielding government bonds had risen to 60 percent from 50 percent in 2022.