Saudi Arabia, Philippines to join JPMorgan emerging market bond index in 2027

[LONDON] JPMorgan said on Wednesday (Apr 22) that Saudi Arabia and the Philippines will be added to its local currency emerging market debt index from Jan 29 next year.

The inclusion will cover Saudi riyal-denominated sovereign sukuk and Philippine peso-denominated government bonds, both entering the widely tracked GBI-EM index series.

Their weights will be introduced gradually, with Saudi Arabia expected to reach 2.52 per cent and the Philippines 1.78 per cent once fully phased in.

The 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 per cent from 10 per cent.

As a result, major markets including China, India, Mexico, Malaysia, and Indonesia will see their weight reduced to the new limit.

Based on current eligibility criteria, about eight Saudi sovereign sukuk with a combined value of roughly US$69 billion could be included, JPMorgan said.

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For the Philippines, nine eligible government bonds with a combined value of around US$49 billion are under consideration. REUTERS