London The South African Government Bond Index is now included in the Citi World Government Bond Index (WGBI). It becomes the first African government bond market to be incorporated within Citi’s influential WGBI.
South Africa’s market value represents 0.45 percent of the market value of the World Government Bond Index in the October 2012 preliminary profile. It ranks 17th by market weight. South Africa’s inclusion brings the number of sovereign markets in the index to 23.
In April, South Africa became eligible for inclusion in the WGBI, having satisfied the three criteria of size, credit quality and lack of barriers to entry. Its entry into the WGBI as of October 2012 was confirmed in June.
“We are delighted to welcome South Africa into the WGBI. There are 12 South African government bonds in the index, with a market value of US$ 93.82 billion, and their appearance in the WGBI affords the opportunity to investors to gain exposure to this exciting market,” said Ernest Battifarano, Global Head of Index Development and Production.
The WGBI is a total-return index created in 1987. Entry criteria are: total outstanding amount of a market’s eligible issues must exceed US$ 50 billion, EUR 40 billion and JPY 5 trillion; domestic long-term credit rating must be at least A-/A3 by S&P or Moody’s; and there must be no barriers to entry. WGBI includes sovereign bonds from developed and emerging markets.
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