JPMorgan Unveils Frontier Local-Currency Debt Index Covering $330 Billion
JPMorgan is set to launch its long-awaited 'frontier' local-currency government bond index, giving investors a new benchmark for nearly $330 billion of debt across some of the world's fastest-growing economies.
The Wall Street bank's new 'GBI-EM Edge' benchmark will cover bonds from 26 countries, including Egypt, Vietnam, Morocco, Kazakhstan, Bangladesh, Pakistan, Nigeria, and Sri Lanka, many of which have enjoyed strong market rallies in recent years after crises.
The World Bank says frontier economies are home to a fifth of the world's population but account for just 3.1% of global capital flows and less than 5% of global GDP.
Economists also see the new debt indexes helping expand local-currency markets, something long-championed by the World Bank and IMF as a way to reduce debt crises caused when currency crashes leave governments unable to pay dollar debt.