FTSE Russell, a global index provider, said FTSE TMX Global Debt Capital Markets and State Bank of India (SBI) have signed a letter of intent to develop a new index – the FTSE SBI India Bond index.
This index will track Indian fixed income securities.
SBI Mutual Fund, the asset management subsidiary of SBI, intends to use the new index as the basis for a new investment product.
Advised by SBI Capital Markets (SBICAP), the letter of intent, signed in the same week of the visit of Prime Minister Narendra Modi to the UK, is a first for FTSE Russell.
It provides FTSE Russell and its parent company London Stock Exchange Group (LSEG) with an important platform in India’s burgeoning domestic financial market.
FTSE SBI Bond indices SBI Chairperson Arundhati Bhattacharya said that SBI was delighted to be partnering with the London Stock Exchange Group to create the FTSE SBI Bond indices for India.
Despite investor interest in India’s ongoing growth story, at present Indian issuers’ bonds do not have a credible global benchmark for passive investment funds, she said.
The FTSE SBI Indian Bond indices will be a catalyst in the ongoing development and deepening of India’s sovereign and corporate bond markets, the SBI Chairperson said. It will provide a benchmark for attracting passive funds into Indian bonds as an asset class, she added.
Further, it will contribute to bond liquidity and dynamic pricing, as well as enable the evolution of the secondary market for Indian issuers’ bonds.
Donald Keith, Deputy Chief Executive Officer, FTSE Russell, said this was an important step for FTSE Russell and LSEG, as a whole, “providing us with a strong platform and strategic alliance for building our presence in India”.
Fixed income market boost He said that FTSE Russell and LSEG are fully committed to supporting SBI’s ambitions to develop India’s fixed income market as well as facilitating closer ties between India and international investors.
“Together with State Bank of India, we will provide the tools to build investment in India, developing deeper pools of international liquidity in the sovereign and corporate bond markets,” Keith said.