The State Bank of India has introduced the FTSE SBI Bond Index series in partnership with the global index provider FTSE 100, which the bank hopes would give investors from India, U.K. and globally, tools 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, chairman, SBI, at the unveiling at the London Stock Exchange on Friday.
“With respect to the Indian government bond market, we didn’t have any international indices on which international 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 what we lacked was... enough depth in terms of the various types of products; … it is important to have benchmarks on which people can rely; so, this index, launched in collaboration with the London Stock Exchange, will ensure that international investors have a benchmark that is transparent, well governed and something they can easily rely on.”
She said that there were no products as yet linked to the index and that they 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 the SBI’s asset management division.
She added that they had asset manager Amundi as their joint venture partner to see if they would like to launch an EFT for their international investors based on this index.
‘Products coming soon’
“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 that there will be enough interest in in and that people will innovate and have products based on this.”
She anticipated products emerging in the next three to five months following 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 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.”