NEW YORK: FTSE Russell will add Chinese government bonds to its flagship World Government Bond Index (WGBI) starting in 2021 and pending confirmation in March, the index provider said on Thursday.
Chinese government bonds, a $1.5 trillion market, are already a part of the JPMorgan and Bloomberg Barclays index suites.
But the FTSE WGBI has a far larger passive band of investors following it.
Goldman Sachs estimates there is US$2.5 trillion of global cash following the WGBI, and China's inclusion could drive $140 billion into mainland bonds over the inclusion period.
Malaysian bonds will remain on the watchlist, FTSE Russell said.
FTSE Russell also downgraded Argentina's stock market to "unclassified" from "frontier market" on Thursday, as capital controls remain in place in the South American country.
Vietnam will remain for another year on the equity index watchlist for possible upgrade to "secondary emerging market" from "frontier market," FTSE Russell said.
Russia's stocks were added to the equities index watchlist for possible reclassification from "secondary emerging" to "advanced emerging" market.- Reuters
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