Saudi Arabia sukuk to join widely followed FTSE bond index

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A Saudi money exchanger wears gloves as he counts Saudi riyal currency at a currency exchange shop in Riyadh, Saudi Arabia March 10, 2020. REUTERS/Ahmed Yosri

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NEW YORK, Sept 30 (Reuters) - FTSE Russell said on Thursday that Saudi Arabia's sukuk will be added to its widely followed local currency Emerging Markets Government Bond Index (EMGBI), effective next April.

"Index inclusion of Saudi Arabian sukuk is scheduled to start in April 2022 and is projected to comprise 2.75% of the index on a market value weighted basis," FTSE Russell said in a press release.

The sukuk, sharia-compliant Islamic bonds, have a par amount currently outstanding of 306.1 billion riyal ($81.6 billion).

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India will remain on a watchlist for an upgrade to their market accessibility score and possible bond index inclusion.

FTSE added that Kazakhstan local currency government bonds will be included in its Frontier Emerging Markets Government Bond Index also effective next April.

On the equity indexes side, Russia and Vietnam were both retained on watchlists for possible classification upgrades. Russia could be upgraded to Advanced emerging from Secondary emerging, and Vietnam to Secondary emerging from Frontier market. Iceland and Mongolia were added to the watchlist for possible promotions.

"In terms of those countries retained on the equity and fixed income Watch Lists, we continue to engage with relevant authorities in India, Vietnam and Russia, and will provide an update to the market in March 2022," said David Sol, managing director of index policy at FTSE Russell.

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Reporting by Rodrigo Campos; Editing by Sandra Maler

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