Government Bonds To Be Included In J.P. Morgan GBI-EM Index In 2024

J.P. Morgan announced that Indian bonds will be included in its GBI-EM index from mid next year. Inclusion in the index will start on June 28th 2024 and extend over the next 10 months. India's weighting is expected to reach a maximum of 10% (going up in 1% increments over this 10 month period).

• J.P. Morgan notes $236bn in funds track the GBI-EM index. 23 Indian Government Bonds with a combined notional value of $330bn are eligible. These bonds fall under the category of fully accessible for offshore investors.
• Speculation will now be around whether other bonds indices also add Indian government bonds to their respective indices.
• So far this year there has been much stronger inflows into Indian equities, nearly $16bn, while net bond inflows have been close to +$3.5bn.
• USD/INR sits just below record highs but has outperformed most other Asian FX so far this year. Currency strength tends to more closely aligned with equity inflows than bond inflows though, with a tendency for offshore investors to hedge equity exposure less.