NEW YORK--(BUSINESS WIRE)--Citi announced that the South African Government Bond Index has become eligible for inclusion in its World Government Bond Index (WGBI). Its April 2012 profile has satisfied all three WGBI requirements -- size, credit, and lack of barriers-to-entry.
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, bringing the number of sovereign markets to 23, effective October 2012.
“This is a big milestone for the WGBI as we continue to diversify our coverage,” said Ernest Battifarano, Global Head of Index Development & Production. “Investors who have not previously considered South Africa may tap into this exciting and developing market.”
There are 11 South African government bonds in the April 2012 profile, with a market value of US$88.34bn. This will carry a projected market weight of 0.44% in the index.
The World Government Bond Index (WGBI) is a total return index that currently includes government bonds from 22 countries. Entry criteria to the index are (1) minimum market capitalization (USD50bn, EUR40bn and JPY5trn), (2) credit rating (domestic long term rating of A-/A3 by either S&P or Moody’s), and (3) no barriers to entry. The index includes both developed and emerging market bonds. Each country will have its own criteria in terms of outstanding amount for bonds to be included in the index.
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