GCC states to enter JPMorgan Bond Index

GCC states to enter JPMorgan Bond Index

JPMorgan has announced that it will include government bonds from the five largest GCC states in its emerging market government bond index. The bonds will be phased into the index during the first nine months of 2019.

Oman is the only GCC country whose bonds will not be included. 

The bond index measures the total return on government bonds that are issued in foreign currency and meet certain liquidity and other requirements.

GCC government bond issuance was around $30bn in the first half of 2018, according to Geneva-based Fisch Asset Management. Qatar and Saudi Arabia each accounted for about one third of the total. 

Inclusion in the JPMorgan indexes is another boost for GCC capital markets. MSCI announced in June that it would upgrade the Saudi stock market, the Tadawul,  to Emerging Market status from May 2019. The Tadawul will also be included in the FTSE Russell Emerging Markets Index from March 2019. 

Inclusion in the indexes is expected to lead to billions of dollars worth of new investment in GCC markets, as fund managers who offer index or tracking funds buy into GCC markets.