Aberdeen to increase investment in Indian bonds amid index inclusion

Public Relations Web Desk: Aberdeen PLC is increasing its investment in Indian sovereign bonds due to their attractive yields, driven by anticipation of significant inflows as a result of their inclusion in global indices. “We are very positive about India,” said Stephen Bird, chief executive of the firm which manages and manages £495 billion ($626 billion) of assets. Still, he feels the market faces some uncertainty ahead of national elections starting next. month. India’s debt market is set to receive a significant inflow of new capital of up to $40 billion, with JPMorgan Chase & Co planning to include the country’s bonds in its index starting from June. At present, foreign investors hold only a small portion of Indian debt.

Additionally, Bloomberg Index Services Ltd. will integrate select Indian bonds into its emerging markets local currency index starting next year. Bloomberg LP, parent company of Bloomberg Index Services Ltd., oversees indices that compete with those offered by other service providers. Closing at 7.09% last Friday, the benchmark 10-year yield pulled back from a nine-month low of nearly 7% in March. The yield could fall further to 6.78% by the end of the year, according to a Bloomberg survey of strategists.

Overall, Bird expects emerging markets to outperform when the Federal Reserve begins its easing cycle. “When rates come down, which they will, emerging markets historically tend to outperform and we think investors need to prepare for that,” he said.

Here are some more scenes from Bird:

In addition to investment-grade credit, local-currency government bonds are preferred in Asia due to their “very good returns”. Less convinced about high-yield because it is “the price of perfection” Positive about tech stocks in Taiwan and Korea, which lead digitalization and electrification; Positive about Japanese equities Monetary policy easing in South America provides good prospects for local-currency bonds in that region