Bloomberg Launches 'New China Index' as More International Investors Watch Interbank Bond Market
Yicai Global
/SOURCE : Yicai
Bloomberg Launches 'New China Index' as More International Investors Watch Interbank Bond Market

(Yicai Global) Jan. 26 -- Bloomberg will increase securities samples of Bloomberg Barclays Benchmark Fixed Income Indices and create a 'New China Index,' as the country's bond market becomes more open and a growing number of international investors watch China's interbank market.

As yuan-denominated securities are not currently eligible for inclusion in the Global Aggregate Index, a new index will be created that combines the Global Aggregate Index and the government and policy bank component of the China Aggregate Index. This index will be launched March 1, 2017.

Upon introduction, the minimum amount outstanding for inclusion in the China Aggregate Index will be increased from CNY1 billion (USD145 million) to CNY5 billion for government securities and from CNY1 billion to CNY1.5 billion for corporate securities, and all eligible securities should be traded in the China Interbank Bond Market, Bloomberg said yesterday.

An EM Local Currency Government + China Index will also be launched on March 1. Both market capitalization-weighted and 10 percent country-capped versions will be created.

"The Bloomberg Barclays Indices have been the most widely used indices for fixed income investors. Many institutions around the world use the indices to design investment products such as exchange traded funds (ETFs). The move will prompt capital to flow into China's bond market," Bloomberg told Yicai Global.

Bloomberg also said that it will continue to assess and manage its indices globally, to act as an important bridge between China and international investors, and to be deeply involved in and support the development of the country's capital markets.

Overseas institutions can participate in China's interbank market via three channels. Foreign central banks, HKD, MOP and CNY settlement banks. Foreign banks participating in renminbi settlement for cross-border transactions may directly engage in the interbank market.

Other overseas institutions may participate in the market as renminbi qualified foreign institutional investors (RQFIIs) or qualified foreign institutional investors (QFIIs).

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