JPMorgan’s move to add India to its emerging market debt index will attract substantial capital inflows into the country.
Inclusion of Indian government bonds JP Morgan’s Emerging Market Index.
JPMorgan’s plan to include Indian government bonds in its widely followed emerging market debt index, potentially directing billions of dollars into the world’s fifth-largest economy. As of June 28, 2024, the index provider will include these securities, with India assigned a maximum weight of 10% in the index.
India’s growing appeal
India’s growing appeal to global investors, driven by robust economic growth and expanding geopolitical influence, underlines this decision, and the pursuit of alternatives to China by global corporations like Apple Inc. While foreign investors have historically had a limited presence in the Indian bond market, there has been a gradual increase in inflows in recent years. Remarkably, India’s assets have displayed resilience during financial turmoil, setting it apart from other emerging markets.
The Eligibility of IGBs
JPMorgan found 23 eligible Indian Government Bonds (IGBs) worth $330 billion, all fully accessible to non-resident investors, for inclusion. India’s inclusion is expected to raise its weight to the 10% maximum in the GBI-EM Global Diversified index and around 8.7% in the GBI-EM Global index. Starting on June 28, 2024, over 10 months, JPMorgan will gradually increase India’s index weighting by 1% until reaching the 10% maximum allocation.
In March, JPMorgan noted increased support, from 50% to 60%, for adding India’s high-yield government bonds to its index. FTSE Russell is also exploring Indian bonds for its emerging market index. JPMorgan stated that it would review Egypt’s eligibility in the GBI-EM series for three to six months due to challenges in currency repatriation, and if these challenges persist, Egypt’s status in the GBI-EM series will face reconsideration.
Join our upcoming master class on Trading Potential on Monthly Expiry days to learn practically of the points discussed above.
Also, Check our Article on Zero to Hero Option Trading Strategy (80% ACCURACY) – 2023
Disclaimer: The information provided in this Blog is for educational purposes only and should not be construed as financial advice. Trading in the stock market involves a significant level of risk and can result in both profits and losses. Spider Software & Team does not guarantee any specific outcome or profit from the use of the information provided in this Blog. It is the sole responsibility of the viewer to evaluate their own financial situation and to make their own decisions regarding any investments or trading strategies based on their individual financial goals, risk tolerance, and investment objectives. Spider Software & Team shall not be liable for any loss or damage, including without limitation any indirect, special, incidental or consequential loss or damage, arising from or in connection with the use of this blog or any information contained herein.
