📈 Sri Lanka to Feature Among Top Weights in JPMorgan’s New Frontier Debt Index

JPMorgan will launch its "GBI-EM Edge" local-currency government bond index by end-September 2026, featuring Sri Lanka as one of its top-weighted nations following a strong post-crisis market rally. • Key Highlights & Market Impact: • Sri Lanka & Top Peers: Sri Lanka joins major frontier economies like Egypt, Vietnam, Morocco, Kazakhstan, Bangladesh, Pakistan, and Nigeria with top weightings in the new benchmark. • Market Size: Tracks nearly US$ 330 Bn in local-currency government debt across 26 countries out of a total US$ 1 Tn tradable local-currency EM debt market. • Yield & Returns: Offers average nominal yields of ~10.4% (~440 bps above JPMorgan's standard EM local currency index). Back-testing reveals returns 1.2 percentage points higher than the mainstream EM index since late 2017. • Index Structure & Allocation: • Regional Breakdown: African nations comprise ~45%, while Frontier Asia (including Sri Lanka, Vietnam, Pakistan, Bangladesh, and Kazakhstan) accounts for nearly one-third. • Inclusion Criteria: Requires bonds with a minimum size equivalent to US$ 250 Mn and at least 2.5 years to maturity. Individual country weightings are capped at 8%. • Economic Context: • Expansion into local-currency debt benchmarks supports Sri Lanka's economic resilience by helping reduce currency-mismatch debt risks typical of hard-currency liabilities.