GCC bonds yielded returns of 0.8 per cent compared to a loss of 2.5 per cent in the emerging market bond index
. This outperformance of GCC bonds last year was partly attributed to the news of index inclusion, firm oil prices and continuation of reforms in the region.
A potential Emerging Market Bond Index
inclusion is a swing factor for GCC credit and could lead to an estimated $30 billion of inflows into the region, according to analysts at the Bank of America Merrill Lynch.
JP Morgan's announced inclusion of five GCC countries in its prominent Emerging Market Bond Index
(EMBI) could bring another $30bn in inflows to the region.
The JP Morgan Emerging Market Bond Index
(EMBI) was formed in the early 1990s after the issuance of the first so-called Brady bond.
EMSH tracks the DBIQ Short Duration Emerging Market Bond Index
, which is composed of a diversified portfolio of U.S.
Data from the BSP showed that the Emerging Market Bond Index
(EMBI) + Philippine spreads, which is the additional yield sought by investors on Philippine bonds over the yield on US Treasuries, averaged 209.9 basis points in the second quarter.
Peru has the third lowest EMBI (Emerging Market Bond Index
) spread in Latin America, after Mexico and Chile, and an estimated economic growth rate of 3.5% in 2009, compared to the estimated regional growth rate of 0%2.
Some GCC securities (worth nearly $340 billion) would benefit from the gradual inclusion by end of January 2019 to JP Morgan Emerging Market Bond Index
. The Middle East's share of global emerging markets issuance climbed from 12.5 per cent to 14.8 per cent by end of 2018.
Gulf bonds JP Morgan announced the inclusion of GCC countries' bonds to its Emerging Market Bond Index
(EMBI) from January 2019.
For example, the Citi Group MENA Broad Bond Index returned 6,31 per cent till September end, while JP Morgan Emerging Market bond Index
returned 15 per cent in the same time period.
Most of these countries are planning to raise at least $500 million each, which will make them eligible to be included in JP Morgan's Emerging Market Bond Index