Nomura Launches India Local Government Bond Index
Highly replicable tracking tool for increased portfolio returns
Hong Kong, March 7, 2011 – Nomura, the global investment bank, has launched its India Local Government Bond Index, a tracking tool that investors can replicate in order to generate higher portfolio returns.
India's government bond market, one of the largest in Asia ex-Japan, more than doubled in the past six years in terms of amount outstanding to USD 510bn in 2010, stimulating demand for a bond index with good liquidity and coverage. However, many indices currently available often offer only one of these benefits, with a focus on the latter to the detriment of the former. This means that index returns may be hard to attain. "Our index is focused on liquid bonds – and hence is highly replicable - while at the same time offers a high degree of coverage," said Des Supple, Head of Local Markets Rates Research for Asia ex-Japan at Nomura. "For investors looking to purchase a product which generates returns that are truly reflective of the underlying market, our index offers more representative results than current proprietary indices."
The index incorporates a liquidity enhancement rule, applied quarterly, determining which bonds should be included in the index based on the monthly turnover of all outstanding issues. However, the liquidity rule is set at a level that ensures the index is not subject to a high turnover rate, thereby minimising transaction costs. This allows for an index comprising of, as of end of February, as many as 26 bonds totalling INR 11,321bn (USD 252bn)
The index, which measures the total return performance of Indian government bonds denominated in India rupees, is the first of Nomura's Asia ex-Japan series aimed at measuring bond market performance of individual countries in the region. The index's annual total return for 2010 was 5.76%. Its inception date is December 30, 2005.
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For further information please contact:
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| Name | Company | Telephone |
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| Rosie Slater | Nomura (Hong Kong) | +852 2536 1540 |
| Nandini Goswami | Nomura (Mumbai) | +91 22 4037 4278 |
| Jonathan Williams | Nomura (Singapore) | +65 6433 6336 |
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Nomura
Nomura is a leading financial services group and the preeminent Asian-based investment bank with worldwide reach. Nomura provides a broad range of innovative solutions tailored to the specific requirements of individual, institutional, corporate and government clients through an international network in over 30 countries. Based in Tokyo and with regional headquarters in Hong Kong, London, and New York, Nomura employs over 27,000 staff worldwide. Nomura's unique understanding of Asia enables the company to make a difference for clients through three business divisions: retail, wholesale (global markets, investment banking, and other wholesale), and asset management. For further information about Nomura, please visit www.nomura.com.
