JPMorgan Chase & Co. has reclassified Qatar and Kuwait as developed markets, removing them from the EMBI over six months starting March 31. This may also apply to the UAE in the future. While the reclassification may limit investor access to these countries, it reflects their credit standing and could influence capital flows in the market.
JPMorgan Chase & Co. has reclassified Qatar and Kuwait as developed markets, initiating their phased removal from the Emerging Markets Bond Index (EMBI). This change will occur over six months, commencing on March 31, and may also include the United Arab Emirates next year. The bank announced that new bond issues from both countries will no longer be included in the EM index, which notably excludes two sovereign dollar bonds issued by Qatar.
The reclassification of Qatar and Kuwait as developed markets indicates a significant shift in their investment landscape. While this may narrow the investor base for these nations, it also highlights their financial health. The potential removal of such countries from the EMBI could widen the yield spread on emerging market bonds and reallocate capital flows.
Original Source: www.bnnbloomberg.ca
