NEW DELHI: As the inclusion of Indian government bonds on JP Morgan Global Bond Index-Emerging Market has been postponed after certain concerns raised by investors, JP Morgan Chase & Co has said it will continue to engage with the regulators and market participants for resolutions of the hurdles.
The US-based investment banking firm, which maintains Global Bond Index-Emerging Market, had earlier said it was putting on hold inclusion of Government of India bonds on account of a number of issues raised by investors. The inclusion could be delayed by a year.
On a query sent by this newspaper, Gloria Kim, global head of Index Research and co-head of ESG Research at JP Morgan, said India (rupee) government bonds were placed on positive Index watch for the JP Morgan GBI-EM benchmark in October 2021, and will continue to remain on Index Watch at this time, based on investor feedback. “As part of the Index Watch, we will continue to engage with the regulators and market participants, and gather feedback on sufficient resolutions for the remaining hurdles,” Gloria Kim told TNIE.
Though the JP Morgan executive didn’t elaborate on the reason for putting on hold the inclusion, it is said that investors have raised concern about tedious compliance issues including a lengthy registration process for investors, settlement and custody of assets, etc.
However, Kim did say that “India has one of the largest and most liquid onshore bond markets among EM economies, and over the past two years, the market has made significant strides in easing the access for foreign portfolio investors.” The inclusion of the bonds in the JP Morgan Index was to happen by the September end.