Indian bond inclusion likely to impact weight of three EMs

Mumbai: Indian bonds will start getting included in the JP Morgan Emerging Market Bond Index (GBI EM Index) from June 28 this year.

This inclusion will affect the weight of Thailand, Poland, and Czech in the global bond index, HSBC analysts said in a note.

According to the note, Thailand, Poland, and Czech are the three emerging markets that are likely to see a cut in their respective weights in the global bond index.

HSBC analysts further said that reweighting will not have any significant impact on the index as it will be done over a period of 10 months.

JP Morgan announced the inclusion of Indian government bonds in the global index on September 21, 2023.

Since then, global funds have invested nearly $10.4 billion in Indian bonds.

It was $2.4 billion in the first eight months of 2023.

There was an outflow of $1 billion each in 2021 and 2022.

Assets worth about $200 billion are tracked in the JP Morgan Emerging Market Index and it is estimated that India's weightage in this index will be 10 per cent by March 2025.

Global funds have remained bullish on the Indian debt market since September 2023.

They have invested nearly Rs 83,360 crore ($10 billion) in Indian bonds in the last 10 months.