JOHANNESBURG, April 17 (Reuters) – South African bonds are
likely be included in Citigroup’s World Government Bond Index
(WGBI) by October, widening their investor base and pulling in
potentially billions of dollars to the continent’s biggest debt
market, the U.S. bank said on Tuesday.
The WGBI has 22 countries, and South Africa’s 11 eligible
government bonds would have a 0.44 percent weighting in the
index, based on the current $88 billion value of the debt stock.
South Africa is currently in a three-month “monitoring
period” to make sure it meets entry requirements, Citigroup
said.
“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,” Citigroup
said in a statement.
South Africa’s inclusion could attract market players who
typically invest in G7 debt into Treasuries issued by the
government of Africa’s largest economy.
“The big thing about it is it will add a new investor base
into South Africa and that’s probably the most important part of
this inclusion,” said Leon Myburgh, sub-Sahara Africa strategist
at Citigroup in Johannesburg.
An announcement is expected at the end of June.
The only other emerging markets in the WGBI are Malaysia,
Poland and Mexico.
(Reporting by Xola Potelwa)
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