Bloomberg Adds India's FAR Bonds To Its Emerging Market Local Currency Government Index

In a significant move for India’s financial markets, Bloomberg has incorporated India’s Fully Accessible Route (FAR) bonds into the Bloomberg Emerging Market (EM) Local Currency Government Index.

What Happened: According to a PRNewswire report on Tuesday, Bloomberg plans to gradually include India’s FAR bonds into its EM Local Currency Government Index and related indices over a span of ten months, commencing from January 31, 2025.

The FAR bonds will initially hold a weight of 10% of their total market value in the index. This weight will be progressively increased by 10% each month over the ten-month period, culminating in October 2025, when they will be weighted at their full market value in the indices.

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Upon complete incorporation into the Bloomberg Emerging Market 10% Country Capped Index, India is anticipated to join the ranks of China and South Korea as markets that hit the 10% cap. In the market cap weighted version of the index, India is predicted to be the third largest country following China and South Korea.

Michael R. Bloomberg, founder of Bloomberg LP, stated, “This is an important marker in the development of India’sfinancial markets and a reflection of India’s growing importance to the global economy.”

The decision to include India FAR Bonds in the Bloomberg EM Local Currency Government Index was made after extensive consultation with market participants and stakeholders.

The news sent Indian public sector bank stocks flying with State Bank of India gaining 1.4%, Punjab National Bank up 2.8% and Bank of Baroda climbing 1.7% in late afternoon trade.

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