Key Points
Foreign portfolio investors (FPIs) have purchased 71,817 crore - or around $8.7 billion - worth of Indian government bonds since September 22, the day JP Morgan announced the index inclusion, latest data by Clearing Corporation of India Limited (CCIL) showed..
Mumbai: Overseas ownership of Indian government bonds climbed about $9 billion in just five months since JP Morgan announced its decision to include local sovereign debt in its emerging markets index, illustrating the attractiveness of fixed-income assets in the world's fastest-expanding major economy for bulge-bracket funds in a constant global hunt for stable currencies and credible investment options...
To be sure, for the whole of 2023, overall FPI investment in Indian debt - including corporate bonds - was $8.3 billion.. "IGBs (Indian government bonds) have seen more than $8 billion of investments so far, (orders) coming from a diverse spectrum of offshore investors," said Parul Mittal Sinha, Head - Financial Markets, India, Standard Chartered Bank.es..
"These range from sovereign wealth funds, global asset managers to bank FPIs that cater to demand from hedge funds through offshore derivative instruments," Sinha said.. Robust overseas demand for Indian debt will help restrain bond yields, which have an inverse relationship with instrument prices that are expected to climb on higher demand..
Investors have stepped up purchases of Indian bonds in anticipation of price gains ahead of a likely turn toward easier monetary policy by global central banks and the actual event of index inclusion with requisite weightings...
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