JP Morgan consults on including Saudi Arabia, Gulf states in key bond index
JP Morgan has started a consultation on including Gulf states in its widely tracked emerging market government bond indexes.
JP Morgan’s EMBI bond index is a key performance benchmark for emerging market investors. Inclusion in the index can encourage hundreds of billions of dollars of buying of that country’s bonds, lowering its borrowing costs.
Slides produced as part of the bank’s annual index “governance consultation” first looked at various metrics for Gulf states, whose relatively high incomes don’t always fit the standard definition of an “emerging” market.
Gulf Cooperation Council (GCC) countries - Saudi Arabia, Bahrain, Kuwait, Oman and Qatar - have issued a quarter of all new debt sold by emerging markets in each of the last three years. They now account for 14 percent of total EM debt stock.