FTSE Russell and the Johannesburg Stock Exchange (JSE) on Monday, 6 April 2020, launched a series of co-branded fixed-income indexes, following the extension of their index partnership to fixed income. The duo have partnered in providing equity indexes since 2002 and agreed to launch co-branded fixed-income indexes in 2017.
In a statement, Waqas Samad, Group Director, Information Services, LSEG and CEO FTSE Russell expressed the company’s delight to expand the important and long-standing partnership with JSE in South Africa to include fixed income indexes. According to the CEO, “FTSE Russell aims to be the world leader in multi-asset indexing and now, domestic and overseas investors in local South African debt are able to benefit from FTSE Russell’s robust, transparent and objective approach to managing fixed income benchmarks.”
This new agreement means that FTSE Russell will now serve as the benchmark administrator for JSE’s fixed income-indexes and will provide daily index calculations on the FTSE/JSE All Bond Index Series (ALBI) and FTSE/JSE Inflation-Linked Index Series (CILI). That is, FTSE Russell would be designing indexes to reflect the performance of South Africa’s fixed-income securities issued.
Also commenting on the partnership, Leila Fourie, CEO of Johannesburg Stock Exchange said, “Our partnership with FTSE Russell has seen local and foreign investors in stocks listed on our markets benefit from the expertise of an independent global index provider for almost twenty years.” Further commenting he said that the “launch extends these benefits to corporate and government bond investors and will improve international access to our debt markets.”
On Friday, March 27, 2020, credit rating firm Moody’s downgraded South Africa’s debt rating to junk status. Meaning that the country will be excluded from the FTSE World Government Bond Index (WGBI), hampering the country’s chances of borrowing in the international debt market and scaring many of the world’s investment funds from investing in its junk-bonds.
However, the launch would be providing investors with access to a comprehensive multi-asset and fixed-income research on the South African fixed-income market. It would further offer investors a complete range of index solutions across asset classes while helping them decide whether or not to invest in a particular security in the country’s stock market.