China onshore bonds to be included in three of Citi’s global bond indexes
Move seen as a significant milestone in Beijing’s efforts to woo foreign investors to its bond market, and to counter capital outflows
Citigroup is to fully include onshore Chinese bonds in its emerging markets and regional indexes, marking another significant milestone in Beijing’s efforts to woo foreign investors to its bond market, and to counter capital outflows.
Citi Fixed Income Indices said China bonds will be included in its three government bond indexes – the Emerging Markets Government Bond Index (EMGBI), Asian Government Bond Index (AGBI), and the Asia Pacific Government Bond Index (APGBI).
It will also set up two new indices, the EMGBI-Capped and AGBI-Capped, which limit individual market exposure by imposing maximum country weightings.
The Chinese bond market’s proportion in these indices will gradually increase to their full weighting over three months, but the timetable to kick off the inclusion and the exact weightings have not yet been revealed, according to a statement from the company.
Citi’s more widely used World Government Bond Index, however, still remains RMB-free.
“We are pleased to see regulatory changes that enable market access, allowing us to reflect and provide new investment opportunities in our indices,” said Arom Pathammavong, global head of Citi Fixed Income Indices.
