The indexes are key performance benchmarks for international investors in emerging market debt.
The UAE and four other Gulf states will enter JP Morgan’s emerging market government bond indexes next year, a development likely to attract billions of dollars of new foreign investment into their debt.
Membership in the indexes will help a country sell bonds and reduce its borrowing costs.
Sovereign and quasi-sovereign debt issuers from the UAE, Saudi Arabia as well as Bahrain and Kuwait will become eligible for the EMBI Global Diversified (EMBIGD), EMBI Global (EMBIG) and EURO-EMBIG indexes.
Both conventional bonds and Sukuk will be eligible for inclusion in indexes, but Sukuk will need to have a credit rating from at least one of the three major rating agencies to be included.
The inclusion of the GCC countries in the indexes will leave them representing around 11.2 per cent of JP Morgan’s EMBI Global Diversified and EMBI Global series.
The minimum size for inclusion in the indexes is $500 million, and during the inclusion process, instruments will need to have a maturity date beyond March 2022, reported Reuters.