JP Morgan yesterday announed that India is going to be now part of it’s Government Bond Index-Emerging Markets (GBI-EM) index. This could bring in around $20 billion in investments. This inclusion will start on June 28, 2024, and will happen over 10 months. The index weight for India will increase by 1% each month until it reaches a maximum of 10%, according to JP Morgan. About twenty Indian government bonds, worth a total of $330 billion, will be eligible for this index.
These developments are promising for Indian financial markets, and they could also help strengthen the Indian rupee and increase investments from various sources.
If you have any questions or concerns, please feel free to share them, and we’ll do our best to address them.
Once the listing begins you will be able to check the weightages of the bonds here: Indices Composition
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Bloomberg has announced its participation in the competition
Bloomberg Index Services (BISL) will incorporate India Fully Accessible Route (FAR) bonds into the Bloomberg Emerging Market (EM) Local Currency Index effective January 31, 2025. The gradual inclusion of these bonds will span a 10-month period, commencing on the rebalance date of January 31, 2025, as per information in the Bloomberg Fixed Income Indices document.
Anticipate a decrease in yields in the near future with the active involvement of major institutions. Looking ahead a few couple of years, it’s likely that the 10-year yield will dip below 600 basis points. How do you plan to secure your return on investment? Personally, I’m considering investing more the in GS expiring in 2073 [746GS2073] to lock in my ROI for the next five decades. Do share yours, I’d love to hear about your strategy too!
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