JPMorgan to Launch Local Currency Index for Frontier Markets, Including Morocco

Introduction of a New Index

JPMorgan is preparing to launch a new index that will focus on local currencies within frontier markets. This initiative will serve as a complement to the NEXGEM index, which has been operational for the past fifteen years.

Countries Included in the Index

The forthcoming index is expected to encompass between 20 and 25 countries, with Egypt, Vietnam, Kenya, Morocco, Kazakhstan, Pakistan, Nigeria, Sri Lanka, and Bangladesh projected to hold the highest weightings.

Weighting and Criteria

To mitigate excessive concentration, a weighting cap of 8% to 10% per country will be implemented. Additionally, the index will only include bond issuances with a minimum outstanding amount of $250 million, which may lead to the exclusion of certain issuers, such as Zambia.

Market Context and Interest

This project emerges amid a renewed interest in riskier and more diversified debt, driven by the weakening of the dollar and the recent performance of various frontier markets.

JPMorgan's Position

At this stage, JPMorgan has refrained from providing any comments regarding the new index.