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Johannesburg - South African bonds are likely be included in Citigroup’s World Government Bond Index (WGBI) by October, widening their investor base and pulling in potentially billions of dollars to the continent’s biggest debt market, the US bank said on Tuesday.
The WGBI has 22 countries, and South Africa’s 11 eligible government bonds would have a 0.44% weighting in the index, based on the current $88bn value of the debt stock.
South Africa is currently in a three-month “monitoring period” to make sure it meets entry requirements, Citigroup said.
“If South Africa continues to meet all WGBI criteria with the May and June 2012 profiles, it will become the first African government bond market to be included in the WGBI,” Citigroup said.
South Africa’s inclusion could attract market players who typically invest in G7 debt into Treasuries issued by the government of Africa’s largest economy.
“The big thing about it is it will add a new investor base into South Africa and that’s probably the most important part of this inclusion,” said Leon Myburgh, sub-Sahara Africa strategist at Citigroup in Johannesburg.
An announcement is expected at the end of June.
The only other emerging markets in the WGBI are Malaysia, Poland and Mexico.
The WGBI has 22 countries, and South Africa’s 11 eligible government bonds would have a 0.44% weighting in the index, based on the current $88bn value of the debt stock.
South Africa is currently in a three-month “monitoring period” to make sure it meets entry requirements, Citigroup said.
“If South Africa continues to meet all WGBI criteria with the May and June 2012 profiles, it will become the first African government bond market to be included in the WGBI,” Citigroup said.
South Africa’s inclusion could attract market players who typically invest in G7 debt into Treasuries issued by the government of Africa’s largest economy.
“The big thing about it is it will add a new investor base into South Africa and that’s probably the most important part of this inclusion,” said Leon Myburgh, sub-Sahara Africa strategist at Citigroup in Johannesburg.
An announcement is expected at the end of June.
The only other emerging markets in the WGBI are Malaysia, Poland and Mexico.
