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JPMorgan adding China to benchmark bond indexes from February 2020

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JPMorgan adding China to benchmark bond indexes from February 2020

JPMorgan Chase & Co. plans to add Chinese government debt to its benchmark emerging-market indexes in a phased process commencing Feb. 28, 2020, Bloomberg News reported Sept. 4, citing a same-day statement from the bank.

China's weight will be capped at 10% of the Government Bond Index-Emerging Markets global diversified and narrow diversified indexes. The country's inclusion will take place over a 10-month period, with a 1% addition per month, the bank said. It added that it intends to set up indexes that exclude China to provide investors with alternatives as required.

Analysts at Goldman Sachs Group Inc. had previously estimated that China's addition to the indexes could lead to about US$3 billion of monthly inflows into its domestic bond market a month, the news outlet reported.

The move comes after Bloomberg LP's Bloomberg Barclays began adding Chinese bonds to its global benchmark in April. Further, FTSE Russell is expected to make a decision regarding China's inclusion to the World Government Bond Index on Sept. 26, the report added.