FTSE Russell, a global index provider, has announced the signing of letter of intent between FTSE TMX Global Debt Capital Markets and State Bank of India to develop in partnership, a new index, FTSE SBI India Bond index.
This new index would track Indian fixed income securities.
SBI Mutual Fund, the asset management subsidiary of State Bank of India, intends to use the new index as the basis for a new investment product.
Advised by SBI Capital Markets (SBICAP), the letter of intent, signed in the same week of the visit of Indian Prime Minister, Narendra Modi to the UK, is a first for FTSE Russell.
This provides FTSE Russell and it's parent company London Stock Exchange Group (LSEG) with an important platform in India's burgeoning domestic financial market.
FTSE SBI Bond indices
Arundhati Bhattacharya, Chairperson, State Bank of India, said that SBI was delighted to be partnering with London Stock Exchange Group to create the FTSE SBI Bond indices for India.
Despite investor appetite to access India's ongoing growth story, at present Indian issuers' bonds do not have a credible global benchmark for passive investment funds that captures the India's growth story, she said.
The FTSE SBI Indian Bond indices will be a catalyst in the ongoing development and deepening of India's sovereign and corporate bond markets, the SBI Chairperson said.
It will provide a benchmark for attracting passive funds into Indian bonds as an asset class, she said.
Further, it will contribute to bond liquidity and dynamic pricing, as well as enable the evolution of the secondary market for Indian issuers' bonds.
Donald Keith, Deputy CEO, FTSE Russell, said this was an important step for FTSE Russell and LSEG, as a whole, "providing us with a strong platform and strategic alliance for building our presence in India".
Boosting fixed income market
He said that FTSE Russell and LSEG are fully committed to supporting State Bank of India's ambitions to develop the India's fixed income market as well as facilitating closed ties between India and international investors.
"Together with State Bank of India, we will provide the tools to build investment in India, developing deeper pools of international liquidity in the sovereign and corporate bond markets," Keith said.
The letter of intent signed today will accelerate progress towards significant and exciting milestones in this important new chapter in global finance, he said.