Less than one year after a snub from its world government bond index, FTSE Russell announced that it would now open doors for Chinese debt inclusion.
FTSE Russell said last week that it would begin adding Chinese sovereign debt into its «World Government Bond Index» (WGBI) starting from October next year, according to a statement, highlighting improvements in market infrastructure.
«The Chinese authorities have worked hard to enhance the infrastructure of their government bond market,» according to a statement quoting Waqas Samad, FTSE Russell’s chief executive and director of information services for parent owner London Stock Exchange Group.
«Subject to affirmation in March 2021, international investors will be able to access the second-largest bond market in the world through FTSE Russell’s flagship WGBI.»
Optimism in Flows
Despite the pandemic and rising tensions with China, some onlookers have continued to express optimism about investor confidence after the inclusion. Morgan Stanley previously said that a FTSE Russell index inclusion could lure as much as $90 billion next year while HSBC on Friday forecasted net inflows of $150 billion.
The latest inclusion follows a broader trend of marketing opening by Chinese authorities. In May this year, foreign investor access into mainland equity markets were also loosened after regulators scrapped quota limits for its cross-border channels «Qualified Foreign Institutional Investor» (QFII) and «RMB Qualified Foreign Institutional Investor» (RQFII).
