BUSINESS JPMorgan includes Chinese govt bonds in indexes


JPMorgan includes Chinese govt bonds in indexes

By Chen Jia |

15:43, February 29, 2020

A sign outside the headquarters of JP Morgan Chase & Co in New York. (Photo/Agencies)

Chinese monetary authorities plan to further improve the fundamental financial market infrastructure to attract foreign investors, vowing a continual opening of the domestic bond market.

The comment was made by a senior central bank official on Saturday, after the US-based financial group JPMorgan Chase & Co included Chinese government bonds in its benchmark emerging-market indexes one day earlier.

Since Friday, nine eligible Chinese local government bonds were included in the indexes, capped at 10 percent of the Government Bond Index-Emerging Markets global diversified and narrow diversified indexes, JPMorgan said in an earlier statement.

Analysts predicted that via the inclusion, more than $20 billion in funds may be channeled into the Chinese bond market, and overseas capital will play a more important role in the domestic market.

Pan Gongsheng, vice-governor of the People's Bank of China, said on Saturday that some international bond index suppliers have included Chinese bonds into the major indexes in succession, which "can reflect international investors' confidence in the long-term and healthy development of Chinese economy, as well as their recognition of the opening of China's financial market".

As of the end of January, the Chinese bond market reached a scale of 100.4 trillion yuan ($14.36 trillion). International investors were holding more than 2.2 trillion yuan of Chinese bonds, up by 22 percent year-on-year, according to data from the PBOC.

In April 2019, Bloomberg Barclays added Chinese bonds to its global benchmark. FTSE Russell will consider whether to include Chinese bonds into its World Government Bond Index after the midterm assessment in March.

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