Chinese RMB-denominated government and policy bank securities are set to be added to the Bloomberg Barclays Global Aggregate Index.
The inclusion in the index will start in April 2019 and be phased in over a 20 month period.
When fully accounted for in the Global Aggregate Index, local currency Chinese bonds will be the fourth largest currency component following the USD, EUR and JPY. Using data as of January 24, 2019 the index would include 363 Chinese securities and represent 6.03% of a $54.07 trillion index upon completion of the phase-in.
“Today’s announcement represents an important milestone on China’s path towards more open and transparent capital markets, and underscores Bloomberg’s long-term commitment to connecting investors to China,” says Bloomberg chairman, Peter Grauer. “With the upcoming inclusion of China to the Global Aggregate Index, China’s bond market presents a growing opportunity for global investors.”
“It’s a pivotal time in the development of China’s markets and inclusion in our Global Aggregate Index is significant for facilitating Chinese market access for global investors,” says Steve Berkley, global head of Bloomberg indices. “Our phased approach to inclusion is designed to give investors ample time to prepare for what we believe will be a positive impact on the investment community.”
In addition to the Global Aggregate Index, Chinese RMB-denominated debt will be eligible for inclusion in the Global Treasury and EM Local Currency Government Indices starting April 2019.
Bloomberg will create ex-China versions of the Global Aggregate, Global Treasury and EM Local Currency Government Indices for index users who wish to track benchmarks that exclude China.