V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, views the decision to incorporate Indian bonds into the Bloomberg Emerging Market Index as a vote of confidence in the Indian economy. This move follows JP Morgan’s recent decision to include India in its Emerging Market Bond Index.
Vijayakumar predicts that India’s inclusion in the Bloomberg Bond Index will attract investments exceeding $5 billion, in addition to the anticipated $20 billion investment in the JP Morgan EM Bond Fund.
He emphasizes that India’s inclusion in the EM Bond Fund signifies the maturity and stability of the country’s financial market, reflecting confidence in India’s macro financial stability.
Deepak Jasani, Head of Retail Research at HDFC Securities, highlights Bloomberg’s proposal to add Indian government bonds to its indices, starting January 2025. Bloomberg plans to gradually include India Fully Accessible Route bonds in its Bloomberg Emerging Market Local Currency Government Index and related indices over a 10-month period, commencing January 31, 2025.
Jasani elaborates that Indian FAR bonds will initially represent 10 percent of their full market value in the Bloomberg EM Local Currency Government indices as of January 31, 2025. With a market-cap weighted approach, India is poised to become the third largest country in the index, following China and South Korea.
–IANS