Gemloc gains pace
(22 February 2008 – Australia) The World Bank has announced two new participants in Gemloc, its emerging market local currency bond fund which was established last year.
Bond fund management company Pacific Investment Management (PIMCO), has been selected to both develop and manage a planned new $US5 billion emerging market local currency bond fund.
The World Bank also selected Markit to develop a new emerging markets bond index that will track benchmark local currency bonds. The index is set to be based on criteria including market size and performance, which will assesses the investment climate in a particular country.
The Work Bank created Global Emerging Markets Local Currency Bond Fund, or Gemloc to assist economies that are quickly developing. Gemloc was created to build local currency bond markets of developing economies, thus helping long term projects such as infrastructure.
Gemloc will initially invest in 20 emerging markets including China, Chile, Brazil, Mexico, India, Malaysia, Nigeria, South Africa, Poland, Hungary, Colombia, Egypt and Turkey.
While about 70 percent of emerging market debt is denominated in local currencies, institutional investors hold only around 10 percent of their emerging market debt investments in local currencies. The World Bank, through Gemloc, hopes to increase this investment.
PIMCO Chief Executive, Bill Thompson said there is some credit-worthiness around in some of these countries that is truly an opportunity for investors.
The World Bank also selected Markit to develop a new emerging markets bond index that will track benchmark local currency bonds. The index is set to be based on criteria including market size and performance, which will assesses the investment climate in a particular country.
The Work Bank created Global Emerging Markets Local Currency Bond Fund, or Gemloc to assist economies that are quickly developing. Gemloc was created to build local currency bond markets of developing economies, thus helping long term projects such as infrastructure.
Gemloc will initially invest in 20 emerging markets including China, Chile, Brazil, Mexico, India, Malaysia, Nigeria, South Africa, Poland, Hungary, Colombia, Egypt and Turkey.
While about 70 percent of emerging market debt is denominated in local currencies, institutional investors hold only around 10 percent of their emerging market debt investments in local currencies. The World Bank, through Gemloc, hopes to increase this investment.
PIMCO Chief Executive, Bill Thompson said there is some credit-worthiness around in some of these countries that is truly an opportunity for investors.
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