JPMorgan to include India in emerging market debt index, opening doors for billions in investments

This move encompasses 23 Indian Government Bonds with a combined value of $330 billion, aiming for India’s weight to reach 10%. [View in browser]( [See all newsletters]( 22 September 2023 JPMorgan to include India in emerging market debt index, opening doors for billions in investments [Inclusion will start on June 28, 2024, and extend over 10 months with 1% increments on its index weighting, as India is expected to reach the maximum weighting of 10%] JPMorgan on Friday said it will include India in its widely tracked emerging market debt index, setting the stage for billions of dollars of inflows into the world's fifth-largest economy. India's local bonds will be included in the Government Bond Index-Emerging Markets (GBI-EM) index and the index suite, benchmarked by about $236 billion in global funds according to JPMorgan. JPMorgan said 23 Indian Government Bonds (IGBs) with a combined notional value of $330 billion are eligible. All fall under the category of "fully accessible" for non-residents. - Read:[The big deal about global bonds and India’s inclusion]( "India's weight is expected to reach the maximum weight threshold of 10% in the GBI-EM Global Diversified, and approximately 8.7% in the GBI-EM Global index," said JPMorgan. Inclusion will start on June 28, 2024, and extend over 10 months with 1% increments on its index weighting, as India is expected to reach the maximum weighting of 10%, JPMorgan said. - Read:[All you wanted to know about MSCI EM Index]( India began discussion on including its debt in global indexes in 2019, while also talking to Euroclear about clearing and settlement. It removed foreign investment restrictions on some government securities in 2020 as part of an effort to enter global bond indexes. Several bonds are now part of the "Fully Accessible Route" and do not have foreign investment restrictions. But the government's stance on other issues including capital gains taxes and local settlement delayed its inclusion Foreign investor buying in Indian bonds has remained tepid with net purchases of $3.4 billion so far in 2023. Foreign investors own less than 2% of outstanding Indian government debt. "An inclusion in JP Morgan’s index could see others follow up," BofA Securities said in a report in July. In the same announcement, JPMorgan said Egypt's eligibility in the GBI-EM series will be on review for three to six months, due to reports of "material" hurdles in currency repatriation. "If the hurdles cited by benchmarked investors persist, a status review will be triggered for Egypt's removal from the GBI-EM series," JPMorgan said. Egypt will remain in the index during the review. You Might Also Like [Strategic dividend investing: A path to reliable income and wealth building]( [Personal Finance]( [Strategic dividend investing: A path to reliable income and wealth building]( [SEBI eases norms for large corporates tapping debt market]( [Markets]( [SEBI eases norms for large corporates tapping debt market]( [RBI wants lenders to classify wilful defaulters within six months of an account turning NPA]( [Money & Banking]( [RBI wants lenders to classify wilful defaulters within six months of an account turning NPA]( [Markets near all-time highs: Why you should invest in HDFC Large and Midcap Fund]( [Mutual Funds]( [Markets near all-time highs: Why you should invest in HDFC Large and Midcap Fund]( Stay informed Subscribe to our premium news to stay up-to-date on the in deep news in India. [arrow]( Copyright @ 2023, THG PUBLISHING PVT LTD. If you are facing any trouble in viewing this newsletter, please try [here]( Manage your newsletter subscription preferences [here]( If you do not wish to receive such emails go [here](