Global index provider FTSE RUSSELL of the United Kingdom said on the 7th (local time) that, as scheduled, it will add Korea to the World Government Bond Index (WGBI) starting in April next year.
FTSE RUSSELL, in its semiannual review of bond market country classification that day, reaffirmed the technical inclusion schedule presented in the March review this year. According to it, the inclusion will begin in April next year and be completed in November next year.
Earlier, FTSE RUSSELL announced in the semiannual review last October that it would add Korea to the WGBI starting this November, but in the March review this year it pushed the schedule back to April next year. While delaying the start, it kept the completion timing for November next year. It plans to raise the inclusion weight every month and finish the inclusion at the originally planned time.
FTSE RUSSELL said it "aims to continue working closely with investors, market infrastructure providers, and Korean market authorities to ensure a smooth inclusion, and will continue to gather feedback from market participants on whether this change is being well prepared."
The WGBI, along with the Bloomberg-Barclays Global Aggregate (BBGA) and the JP Morgan Government Bond Index-Emerging Markets (GBI-EM), is regarded as a bond index tracked by institutional investors worldwide. Upon inclusion, effects such as inflows of developed-market funds and reduced Government Bonds funding expense can be expected. The government said last year that inclusion in the WGBI would bring at least $56 billion (about 75 trillion won) into Korea's government bond market.