Bloomberg today proposed the incorporation of India's government bonds into its Emerging Market Index, outlining a phased implementation plan spanning five months, starting in September 2024.
According to the declaration, Indian Fully Accessible Route (FAR) bonds are set to be integrated into Bloomberg's EM local currency indices, commencing with an initial weight of 20 per cent of their complete market value in September 2024.
The weight of these bonds will experience gradual increments of 20 per cent of their complete market value every month throughout the specified period. Once phased completely, the bonds will be fully capped at 10 per cent weight within the index.
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"At that point, Indian Rupee will become the third largest currency component, following the Chinese Renminbi and the South Korean Won, within the Bloomberg Emerging Market Local Currency Index. Using data as of November 30, 2023, the index would include 32 Indian securities and represent 6.99% of a $5.96 trillion index," noted the proposal by Bloomberg.
Nevertheless, Indian bonds will remain excluded from the prominent Bloomberg Global Aggregate and related indices. Bloomberg will persist in monitoring market-related developments before considering any adjustments.
The proposal follows JP Morgan's announcement last year to undertake a similar initiative, marking a noteworthy period for the Indian debt market.
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