Markit expands GEMX, emerging market local currency indexes

By Jennifer Chiou

New York, Sept. 16 - Markit announced the expansion of GEMX, a family of benchmark indexes referencing emerging market debt denominated in local currencies.

According to a Markit news release, the additions to the GEMX extend its reach to include more emerging markets and additional debt types.

Specifically, the index has been extended to 24 countries from 19 countries to include Costa Rica, Kenya, Romania, Sri Lanka and Uruguay.

Markit added that the index will now include inflation-linked debt and dual currency bonds. Up to 10 more inflation-linked bonds whose coupon and redemption are linked to a country's Consumer price index are eligible for inclusion in the index.

The 15 nominal bonds already included in the index may now contain up to three dual currency bonds. In addition, Markit said that the 10 inflation-linked bonds may include up to two dual currency bonds.

The index has raised its ratings criteria for local currency sovereign debt to a minimum of B-/B3.

The changes become effective on Nov. 30, with a three-month transition period ending Feb. 28, 2010, according to the release.

The GEMX oversight committee has approved the changes.

The GEMX was launched in April 2008 and is composed of China, India, Indonesia, Malaysia, Philippines, Sri Lanka, Thailand, Egypt, Hungary, Kenya, Morocco, Nigeria, Poland, Romania, Russia, South Africa, Turkey, Brazil, Chile, Columbia, Costa Rica, Mexico, Peru and Uruguay.

Markit is a financial information services company with offices in London and New York.

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