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JPMorgan adds India to pivotal bond index

Inclusion expected to drive billions of dollars of inflows in rupee-denominated debt
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{"text":[[{"start":12.17,"text":"JPMorgan will add India to its benchmark emerging-market bond indices, a move that investors expect will attract billions of dollars of inflows to the country’s government debt market. "}],[{"start":24.39,"text":"The inclusion to JPMorgan’s influential indices concludes years of negotiation between banks, investors and India’s government. "}],[{"start":33.81,"text":"It will give investors greater exposure to the world’s fifth-largest economy as providers work to diversify their indices after Russia was removed over its invasion of Ukraine and growth slows in China. "}],[{"start":46.730000000000004,"text":"The US bank will include 23 Indian government bonds worth $330bn into its Government Bond Index-Emerging Markets benchmarks from June 2024. "},{"start":58.634,"text":"The country would have a maximum weight of 10 per cent on the index, said JPMorgan on Thursday. "}],[{"start":65.67,"text":"The resulting inflows into India’s government bond market could reach $25bn-$26bn as investors who track the index rebalance their portfolios, said Madhavi Arora, lead economist of Mumbai-based financial group Emkay Global. "},{"start":82.162,"text":"Goldman Sachs has previously pegged the figure at $30bn. "}],[{"start":88.07,"text":"India bonds and the rupee advanced at the open. "},{"start":91.72399999999999,"text":"The 10-year yield fell six basis points to 7.13 per cent, and the currency rose 0.2 per cent to 82.8 against the dollar. "}],[{"start":102.6,"text":"In the “last two years there has been a lot of demand to the index provider from the investors” for India’s bond inclusion, said Jayesh Mehta, India country treasurer at Bank of America. "},{"start":114.029,"text":"“With China slowing down and Russia being out, the emerging market tracking investors do need something. ”"}],[{"start":121.44999999999999,"text":"In 2020, India’s central bank introduced rupee-denominated bonds that had no restrictions on foreign ownership, paving the way for JPMorgan to add India to its index. "},{"start":133.129,"text":"It said in its announcement late on Thursday that its indices would include only “fully accessible route” bonds. "}],[{"start":140.79999999999998,"text":"JPMorgan is the first major emerging market benchmark provider to add India. "},{"start":146.379,"text":"Bloomberg and FTSE have not included the country. "},{"start":149.909,"text":"India’s economy has outperformed many of its emerging market peers, with the south Asian nation’s Nifty 50 benchmark hitting all-time highs this year. "}],[{"start":160.29999999999998,"text":"Tapping global markets should help New Delhi reduce its cost of borrowing. "},{"start":165.34199999999998,"text":"Yet the downside could be the arrival of active investors who may sell faster than passive tracker funds in a downturn. "},{"start":172.47199999999998,"text":"“That could be painful,” said Mehta. "}],[{"start":175.98,"text":"Some bankers hope JPMorgan’s move will encourage rating agencies to lift their assessment on India — S&P, Fitch and Moody’s all give India their lowest investment-grade rating. "}],[{"start":188.10999999999999,"text":"“Hopefully rating agencies will respect investors’ viewpoint,” said Nilesh Shah, managing director at mutual fund Kotak Mahindra AMC. "}],[{"start":197.21999999999997,"text":""}]],"url":"https://creatives.ftacademy.cn/album/123157-1695380887.mp3"}

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