Chinese onshore bonds to join Citi Emerging Markets indices

March 8, 2017

HONG KONG – Citi Fixed Income Indices is to include Chinese onshore bonds in its emerging markets and regional government bond indices. Citi is also to expand its World Government Bond Index family with two new indices, the World Government Bond Index – Developed Markets (WGBI-DM) and the World Government Bond Index – Extended (WGBI-Extended), to complement the existing World Government Bond Index (WGBI), which will remain unchanged.

“With the issuance by People's Bank of China of its guidelines in February 2016 on the further opening of the China Interbank Bond Market for eligible foreign institutional investors, we have been monitoring China’s eligibility for inclusion in our indices,” Citibank said..

“After an extensive review which included consultations with market participants, we have concluded that China is eligible to join three existing government bond indices – the Emerging Markets Government Bond Index (EMGBI), Asian Government Bond Index (AGBI), and the Asia Pacific Government Bond Index (APGBI).

“Additionally, we are introducing two new related indices – EMGBI-Capped and AGBI-Capped – that are designed to limit individual market exposure by imposing a maximum country weight criterion.

“Given the size of the China market, its proportion in these indices will gradually increase to its full weight over a 3-month period.

“Following our periodic review, we have also determined the need for the expansion of our long-standing World Government Bond Index family to better serve our global investor base with the creation of two new indices.

“The WGBI-DM will exclude emerging markets based on classifications defined by the International Monetary Fund and the World Bank. The WGBI-Extended will comprise 26 markets, adding China, Korea, and Israel to the WGBI constituents. The WGBI remains unchanged with 23 markets. (ATI).