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State Bank of India (SBI) has launched the FTSE SBI Bond Index series in partnership with global index provider FTSE 100, which it is hoped will give tools to investors from India, the UK and globally to analyse India’s government bond market, and drive growth in this market.
“With the launch of this index along with FTSE Russell, our intention is to give people a benchmark on which they can make investment calls,” said Arundhati Bhattacharya, State Bank of India Chairman, at the launch at the London Stock Exchange on Friday.
“With respect to the Indian government bond market, we didn’t have any international indices on which investors could take a call as to whether they would like to come in and invest,” she said.
“There is a lot of capital wanting to come into India. But there was not enough depth in terms of the various types of products and what we lacked was a transparent benchmark on which people could rely… This index, launched in collaboration with the London Stock Exchange, will ensure that international investors have an international benchmark that is transparent, that is well governed and that is something they can easily rely on,” she said.
She said that there were no products as yet linked to the index and SBI would be working with the LSE to get some products in… “We have already approached the capital markets regulator in India to allow us to use this index in order to launch an ETF,” she said of SBI’s asset management division.
“We have a few products in mind and we are sure that given that India is a very good destination at this point of time for investors, there will be enough interest and that people will innovate and have products based on this.”
She anticipated products emerging in the next three to five months following the necessary approvals. “Even though there may not be products in the interim we expect it to be used by international investors.”
Waqas Samad, CEO of fixed income and multi asset benchmarks at FTSE Russell, said they would be working to develop index products that could “create greater awareness and foster liquidity across the Indian domestic fixed income spectrum”.
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