India set to attract billions as JPMorgan adds Government bonds to emerging markets index today

Global funds have already poured in close to $11 billion into index-eligible bonds since the announcement, with expectations of $20-25 billion more in the next 10 months. [View in browser]( [See all newsletters]( 28 June 2024 India set to attract billions as JPMorgan adds Government bonds to emerging markets index today [ India’s robust economic growth, stable currency, and favourable demand-supply dynamics have made its debt a favourite among investors, with its sovereign debt outperforming its index counterparts over the past decade.] India is set to lure billions of dollars more inflows when JPMorgan Chase & Co. adds the nation’s government bonds to its emerging markets index on Friday, opening up a $1.3 trillion market to a broader range of investors. Global funds have already poured close to $11 billion into index-eligible bonds since JPMorgan’s announcement in September. The US bank expects $20 billion to $25 billion to come in over the next 10 months, raising foreign ownership to 4.4% from 2.5% currently. - Read:[JP Morgan: Ample scope for non-resident participation in India’s local bond market]( [India’s debt has become a favorite among emerging market investors]( attracted to the nation’s robust economic growth and a stable currency, which comes courtesy of the central bank. Both sovereign and corporate notes are headed for a sixth straight quarter of foreign inflows, a streak last seen 11 years ago, data compiled by Bloomberg show. “Most of the flows we’re seeing are driven by investors who are tracking the index and should be fairly sticky,” said Vikas Jain, head of India fixed income, currencies and commodities trading at Bank of America Corp. “Declining debt-to-GDP ratio, stable macros and favorable demand-supply for India’s bonds are positive factors.” - Read: [JPMorgan includes India in emerging market debt index: Here’s what analysts said]( For global investors, Indian bonds offers access to a high-growth, high-yield market. The nation’s sovereign debt has outperformed its index counterparts over the past decade, according to JPMorgan. Indian government debt is Asia’s top performing so far this year, returning 5.3% compared to a 1.3% gain in Indonesian local currency bonds, according to data compiled by Bloomberg. Within the so-called Fully Accessible Route bonds eligible for index inclusion, 28 securities worth more than $400 billion will give India a 10% share in the index at peak. That’s a similar weighting to China. - Read: [What India’s inclusion in JPMorgan’s bond index means for its markets]( “Upon inclusion, India will have the single highest duration across the index, with an above average yield-to-maturity,” JPMorgan strategists led by Michael Harrison wrote in a note this week.  More stories like this are available on [bloomberg.com]( You Might Also Like [Technology and financial architecture ready to boost prospects of MSMEs]( [MSME]( [Technology and financial architecture ready to boost prospects of MSMEs]( [SEBI tweaks F&O inclusion, eases delisting norms]( [Markets]( [SEBI tweaks F&O inclusion, eases delisting norms]( [MSME calls for shift towards cash-flow based financing model]( [MSME]( [MSME calls for shift towards cash-flow based financing model]( [It’s the best of times, the worst of times and the era of VUCA is filled with opportunities, says Big Basket’s K Ganesh]( [MSME]( [It’s the best of times, the worst of times and the era of VUCA is filled with opportunities, says Big Basket’s K Ganesh]( Stay informed Subscribe to businessline to stay up-to-date with in-depth business news from India [arrow]( Copyright @ 2024, THG PUBLISHING PVT LTD. If you are facing any trouble in viewing this newsletter, please try [here]( Manage your newsletter subscription preferences [here]( If you do not wish to receive such emails go [here](