Chinese onshore bonds will become eligible for inclusion to Citi’s EM-dedicated and regional bond market index suite plus the newly created WGBI-Extended index.

Market Flash: China’s Inclusion to Bond Index

·         Chinese onshore bonds will become eligible for inclusion to Citi’s EM-dedicated and regional bond market index suite plus the newly created WGBI-Extended index.

·         Foreign participation in onshore Chinese bonds is expected to rise, but the knee-jerk impact may be minimal for now as it comes short of adding Chinese bonds to the flagship WGBI index.

·         Future inclusion of Chinese bonds to other major bond indices may be negative for other regional markets because of the dilution of index weight especially if the total AUM that track the indices do not increase.