[ad_1]
KUALA LUMPUR (September 25): Malaysia to remain on the FTSE World Government Bond Index (WGBI) Watch List, effective September 2020 review, for possible reclassification from Market Accessibility Level 2 to 1.
In the ranking published on September 24, FTSE Russell recognized the additional initiatives promoted by Bank Negara Malaysia (BNM) over the past twelve months to improve the accessibility of the Malaysian government bond market for foreign investors.
He said market improvements include, but are not limited to:
- Improve the liquidity of secondary market bonds through further progress in the establishment of a Debt Management Office, an improved Auction Calendar offering a greater reopening of previous issues, a greater number of Malaysian Government Securities ( MGS) available through repos, bond issuance consolidation to increase the outstanding size per issue and reduce the number of issues and introduce future MGS with physical delivery; Y
- Improve the structure of the foreign exchange market by making the Designated Overseas Office (AOO) program permanent, allowing Japanese local custodian banks to conduct third-party foreign exchange operations and dynamic hedging and streamline currency documentation and due diligence processes.
FTSE Russell said it will continue to engage with its advisory committees and other stakeholders, over the next six months, to determine the best practices emanating from these important and welcome initiatives, which should enhance the experience of international participants in the fixed income market. from Malaysia. .
FTSE Russell said an accessibility level of 2 is required for a market to be considered eligible for inclusion in the FTSE’s World Government Bond Index (WGBI), while an accessibility level of 1 is required for a market to be considered for inclusion in the FTSE Emerging. Markets Government Bond Index (EMGBI) Markets that are on the cusp of reclassification to a higher level following improvements in market accessibility, or to a lower level in the event of deterioration in investment conditions, are included in a watch list.
Meanwhile, FTSE Russell said that Chinese government bonds (CGB) will be listed on the WGBI with listing scheduled to begin with the October 2021 profiles.
He said the start date is subject to the final assertion in March 2021 by members of the FTSE Russell advisory committees and other index users that these recently announced reforms have made the anticipated practical improvements in the market structure.
[ad_2]
