March 23, 2018 / 12:33 PM / a month ago

China bonds to join Bloomberg Barclays Global Aggregate Index

BEIJING, March 23 (Reuters) - The Bloomberg Barclays Global Aggregate Index will include Chinese yuan-denominated government and policy bank securities starting next year, Bloomberg said in a statement on Friday.

The addition of the securities will follow operational enhancements to be implemented by the People’s Bank of China and Ministry of Finance and will be phased-in over a 20-month period starting April 2019, Bloomberg said.

China has been taking gradual measures to develop its bond market, the world’s third-largest, and attract increased foreign investment.

Full inclusion of China’s bond index in global bond indexes could bring $286 billion in passive inflows, Standard Chartered bank said in December.

Local currency Chinese bonds will be the fourth-largest component in the Global Aggregate Index when fully accounted for, after the U.S. dollar, euro and Japanese yen, and would include 386 securities representing 5.49 pct of a $53.73 trillion index, based on Jan. 31, 2018 data, Bloomberg said.

Last July, China launched the Bond Connect scheme, under which eligible institutional investors in Hong Kong and abroad can buy and sell in the Chinese bond market without a quota. (Reporting by Tony Munroe; Editing by Biju Dwarakanath)

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