BLOOMBERG EM LOCAL CURRENCY INDICES
007 Effect! JPMorgan bond inclusion can attract $2-3 billion monthly FII inflows into India
Since October 2023, non-residents have invested nearly $15 billion in Indian government bonds, including $5 billion through USD-settled, INR-denominated supranational bonds. Starting from Friday, passive fund inclusion will begin at a rate of 1% per month, leading to total inflows of $25-30 billion by the time full weightage is reached.
India inclusion in JP Morgan Bond index from today, $25-30 bn flow expected. What it means
India, which has been on index watch since October 21, upon its inclusion will have the single highest duration across the index at 7.03 years, with an above average yield-to-maturity at 7.09%, a JP Morgan note said.
EM bond rally threatened as hawkish flags multiply
The balmy days of dovish monetary policy that fuelled a rally in emerging-market bonds looks to be over as central banks across the developing world turn more hawkish.
Easing global yields bring FPIs back to Indian govt bonds
From May 8 to 22, foreign portfolio investors' holdings of fully accessible route (FAR) Indian government bonds increased ₹3,304.8 crore to ₹1.6 lakh crore, showed latest data on the Clearing Corporation.
India Playbook 2024: Aiming for a trillion dollars in forex reserves by 2029
India's economic trajectory for global investments is driven by stable macroeconomic environment, robust earnings growth, and significant contributions from software services and remittances. Inclusion in MSCI EM index and prominent Emerging Market Bond indices enhances India's investment landscape.
Global bond play: With depth will come volatility, too
Vikas Jain, head of India trading, fixed-income, currencies and commodities at Bank of America, said as foreign investment in Indian bonds heads toward the 10% weight on the JP Morgan bond index next year, the process of discretionary weighting changes would start to play out, creating a more complex trading environment.
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Most clients set up to trade in Indian bonds before index inclusion: JP Morgan
India's upcoming inclusion in JP Morgan's GBI-EM Global Index Suite involves positive market feedback and enhanced accessibility for FPIs through Fully Accessible Route bonds, leading to increased interest from investors globally.
Clout of Indian bonds takes a lift in Asian bond portfolios, says Morningstar report
The inclusion of Indian local currency sovereign bonds into its Government Bond Index-Emerging Markets (GBI-EM) along with UOB Asset Management's launch of an India-focused bond fund is a strong indication of the changing trends that are now favouring the local bond markets.
Indian rupee is now aiming to be world’s alternate reserve currency
Currently, India is the fastest growing major developing economy in the world. Very soon it is expected to be the third largest economy. Global sentiments are bullish on the Indian economy.
Rupee's dive traps FPIs with unhedged govt bond positions
Foreign portfolio investors, having splurged on government bonds ahead of India's inclusion in global indices, offloaded ₹3,966 crore (around $450 million to $475 million) worth of sovereign debt in a single day when the rupee weakened past successive technical levels amid a retreating Chinese yuan and lack of significant market interventions by the Reserve Bank of India.
FPIs inject over Rs 6,100 crore in equities in March on strong economic growth, market resilience
Foreign Portfolio Investors (FPIs) are turning steady buyers as they bought Indian equities worth Rs 6,139 crore so far this month driven by strong economic growth, market resilience and decline in US bond yields.
Will keep India on review for Global Aggregate Index: Nick Gendron, Bloomberg Index Services
Speaking to ET a day after Bloomberg announced India's inclusion in the EM index, Gendron said operational factors being watched closely included repatriation of funds, the time taken to open accounts and the current system of trading hours. Edited excerpts:
Won't be surprised if $35-40 billion comes into Indian bond market: Jayesh Mehta
Jayesh Mehta, a market veteran, discusses the positive impact of Indian FAR (fully accessible route) bonds being included in the Bloomberg EM Local Currency Government indices and the increase in FII flows into the Indian debt market. He predicts flows of $40-45 billion and anticipates currency appreciation depending on macroeconomic factors.
Indian G-secs in Bloomberg EM Index from 2025
On Tuesday, Bloomberg said that Indian FAR (Fully Accessible Route) bonds would be included in the Bloomberg EM Local Currency Government indices with an initial weight of 10% of their full market value on January 31, 2025.
$5 billion boost! Bloomberg to add Indian bonds to EM indices from 2025
The inclusion of Indian bonds in the Bloomberg EM index may bring inflows of $5 billion from passive investors and more likely from active investors as well. In 2023, JPMorgan announced the inclusion of Indian sovereign bonds in its emerging markets index with a maximum weightage of 10% starting June 2024, which is estimated to bring inflows of $20-30 billion.
Bloomberg panel favours India G-secs in EM index
"Following the advisory committee's favourable recommendation, the process now goes to the relevant global index body," one of the people said. "Their product teams are working out modalities of facilitating inclusion by September or October."
Banks ask RBI to permit foreign ETPs to execute g-sec trades
Ahead of Indian sovereign debt’s inclusion in global bond indices, some banks have on behalf of their overseas clients requested the Reserve Bank of India to permit international electronic trading platforms to execute trades in domestic government securities in order to ease market access.
Rupee at a four-month high, outperforms Asian currencies
The rupee's resilience versus the dollar comes amid a recent ratcheting up of geopolitical tensions, with the US and the UK on Thursday launching military strikes against Houthi rebels in Yemen.
Bloomberg to seek feedback on including govt bonds in its EM index
"Following client feedback received during the Bloomberg 2023 Fixed Income Index Advisory Councils, Bloomberg Index Services is launching a consultation to solicit feedback on the proposed inclusion of the India fully accessible route bonds in Bloomberg Emerging Market (EM) Local Currency Index," a document accessed by ET read.
Bloomberg proposes India gilts inclusion in EM Local Currency Index; seeks feedback
As a result, the Indian FAR bonds will be included in the EM Local Currency indices with an initial weight of 20% of their full market value in September. The weight of FAR bonds will then be increased in increments of 20% of their full market value every month over the 5-month period ending in January 2025, when they will be weighted at their full market value (100%) in the indices, Bloomberg said.
Falling prices of oil will add extra zip to rally in EM assets
Brent crude's slide of more than 20% from its September peak suggests inflation is set to slow even further in developing nations in coming months, which will provide another reason to buy their bonds. Emerging-market currencies are also poised to gain as finances of net-oil importers improve.
Keep bhav (price) & bhav (emotion) in check; we could be in for a decade of very strong growth: Manish Chokhani
“We always say in Enam that bhav and bhav dono PE dhyan do. Bhav as in price and bhav as in your emotion, both have to be in check and right now the prices are slightly elevated as are our emotions but it is also justified. If things work out in the coming election and no accident happens geopolitically, it is the decade of very strong growth ahead for us.”
Now, Bloomberg Index looking to include Indian sovereign bonds
The move comes barely two weeks after JP Morgan included India in its Global Government Bond Index-Emerging Markets (GBI-EM) global index suite starting June 2024.
With bond power, comes great responsibility
With a stable macro in terms of fiscal and monetary policy management, it was only a matter of time before this could be sealed.
Outlook on sovereign debt market, Rupee improves on JP Morgan Index move
On Friday, yield on the most-liquid 10-year government bond fell as much as 8 basis points to 7.08% before reversing course. Bond prices rise when yields fall and vice versa. With traders rushing to lock in profits, yield on the bond ended the day two basis points higher than the previous close at 7.19%.
$30 billion-boost! Decoding the impact of JPMorgan's inclusion of Indian bonds in global index
India will enter the global bond index with a 10% weight cap and other smaller JPM EM indices in a staggered manner over a 10-month period beginning June 28, 2024. According to market experts, this could prompt around $30 billion of passive inflows.
Explainer: What entry into JPMorgan Global Bond Index could mean for India?
It was party time for both bond and currency traders as reflected in the market, as gilt prices rose sharply following the announcement, and so did the rupee against the dollar.
India's inclusion in JP Morgan bond index a significant development: Saugata Bhattacharya, Axis Bank
"This is a fairly big news. I am hearing that market analysts are expecting inflows of around $30 billion. $30 billion is a large amount of money, say almost Rs 3-3.5 lakh crore."
Emerging-market stocks are having a moment as growth bets return
It all points to evidence that local-currency bonds, which have been the standout trade in emerging markets this year, are now facing tougher competition from stocks
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