Last Update: October 05, 2022, 12:09 IST
India’s $1 trillion sovereign bond market is the largest among emerging markets that is not part of any global index.
India is a large, deep and high yielding market, which will help in diversifying as well as boosting the average yield of the composite index.
India remains on the radar to join JPMorgan’s influential emerging market local currency debt index after a review on Tuesday, according to a Reuters report, expected to add to the economy this year.
Following Russia’s exit from the GBI-EM (GBI-EM Global Diversified Bond Index) benchmark, some investors expected JP Morgan to include Indian bonds in the index this year. However, others cited investment constraints “including a lengthy investor registration process and the operational readiness required to trade, settle and protect assets”, JPMorgan said in a statement.
According to earlier media reports, India’s sovereign bonds could be added to the global index with an opening weighting of 10 per cent and the country’s $1 trillion sovereign bond market is the largest among emerging markets that are not part of any global index. .
Goldman Sachs Group has said that India There is a large, deep and high yielding market, which will help to diversify as well as boost the average yield of the overall index.
The bond yield stood at 6.458 per cent on January 1 and rose to 6.888 per cent by February 3. Then it declined till February 18 when it touched 6.666 per cent. The end of February also saw the start of the Russo-Ukraine War. Since then, the yield started a steady upward move till June 16, when it touched a high of 7.618 per cent. However, now, yields on 10-year government securities are showing a declining trend from June 16.
The government began considering listing its debt on the global index in 2019 and is in discussions with JPMorgan and Bloomberg Fixed Income Index, while also talking to Euroclear about clearing and settlement.
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