Global index provider FTSE Russell unveiled a number of changes in its annual country classification review for equities and fixed income, including adding South Korea to the watchlist for potential inclusion in the FTSE World Government Bond index, according to a Thursday news release.
India was retained on the watchlist for potential inclusion in the Emerging Markets Government Bond index, while Ugandan government bonds will be added to the FTSE Frontier Emerging Markets Government Bond index, effective April 2023.
In addition, Switzerland will remain on the watchlist for possible upgrade and inclusion in the WGBI.
With respect to equities, Mongolia will be reclassified as a frontier market (moved up from "unclassified market"), effective September 2023, while Nigeria will be added to the watchlist for "potential demotion" from to unclassified from frontier market status, citing that since 2020, market participants and index users have reported "significant ongoing delays to the repatriation of capital from Nigeria."
FTSE Russell explained that the decision to possibly include South Korea in the WGBI came on the heels of announcements by South Korean market authorities of "several proposed initiatives intended to improve the market's structure and the accessibility of South Korean capital markets," the release noted.
With respect to India's potential inclusion in the EMGBI, FTSE Russell said in the release it "continues to engage with its index users and Indian market authorities regarding ongoing market structure reforms."
FTSE Russell explained that the move to include Uganda's bonds in the FEMGBI followed "positive feedback from global investors on index coverage for the frontier emerging markets asset class."
Altai Khangai, CEO of the Mongolian Stock Exchange, said in the release that Mongolia's "inclusion in FTSE Russell's Frontier indices is a notable achievement and will contribute to the diversification and strength of the Mongolian capital market."
Approximately $17.9 trillion is currently benchmarked to FTSE Russell indexes, the release added.
FTSE Russell is a wholly owned subsidiary of the London Stock Exchange Group.