JP Morgan to add Philippines and Saudi Arabia to key EM bond index over 10 months
The inclusion, which was first sketched out in April, will bring Saudi riyal-denominated sovereign sukuk and Philippine peso-denominated government bonds into the US investment bank’s widely tracked GBI-EM index series
Their weights will be introduced gradually, with Saudi Arabia’s weight expected to reach 2.71% once fully phased in, slightly higher than originally flagged, and the Philippines’ weight reaching 1.64%, marginally lower than indicated
The index will add nine Philippine bonds with a total notional value of $50 billion plus eight Saudi sukuk instruments worth $79 billion
JP Morgan’s update is part of a broader index adjustment, which will lower the “Country Cap” – the maximum weight, or share, any single country can hold in the “diversified” index – to 9% from 10%
As a result, major markets including China, India, Mexico, Malaysia, and Indonesia will have their weight reduced to the new limit
