Seoul, Oct 9
South Korea will be included in a key global government bond index run by FTSE Russell, starting in November next year, the London-based organisation has said, a decision expected to help it attract significant foreign investment.
The country will be added to the FTSE Russell's World Government Bond Index (WGBI) effective with November 2025 index profiles and phased in over a one-year period on a quarterly basis as its market accessibility level will be reclassified from 1 to 2, reports news agency.
The inclusion decision was made two years after the country was placed on its watch list. "Several initiatives intended to improve the accessibility of South Korean government bonds for international investors have been implemented by South Korean market authorities, which have facilitated the fulfillment of the criteria for a Market Accessibility Level of 2," FTSE said.
With a market value of $29 trillion, the WGBI is a highly sought-after benchmark that would attract substantial capital inflows from global investors. South Korea is expected to attract as much as 90 trillion won ($67 billion) of foreign investment through the inclusion, officials and experts have said.
FTSE Russell notes a set of market reform measures by the South Korean government as positive developments, including the extension of trading hours of the local currency, allowing third-party foreign exchange and the establishment of a settlement system with Euroclear Bank and Clearstream to improve access by foreign investors to its government bond market.