Government bond index formally launched: 'Market, investment performance can now be easily measured'

BMA Capital Management Limited has launched Pakistan Government Bond Index, to be called the 'BMA Pakistan Government Bond Index' (BMA-PGBI) comprising all outstanding government bonds with maturity of greater than one year. A release of the company said that the index has been formally launched on February 7, 2005, the BMA PGB Index computation commenced from January 1, 2004.
Farrukh Khan, CEO of BMA Capital, commented: "The BMA-PGBI conforms to international standards set by the European Federation of Financial Analysts Societies-European Bond Commission (EFFAS-EBC), which sets the blueprints for the construction of government bond indices for European countries.
In addition, BMA had input from international index specialists and has incorporated local bond market conventions to these standards. This is a landmark development in Pakistan's capital market and is another step in the New BMA Capital's vision to become the top securities firm in the country. BMA recently entered into a joint venture with Abraaj Capital, the largest Private Equity firm in the Middle East", he said.
The BMA-PGBI will provide a broad market benchmark and would represent the characteristics and total return performance of bonds issued in local currency. Index constituents are priced using PKRV yields collated by Pakistan's Financial Markets Association and reported by Reuters. Daily pricing and monthly rebalancing will be reported on Reuters page, BMAI and Bloomberg page. When asked as to why BMA has launched the Pakistan Government Bond Index, Muddassar Malik, Director and Head of Research stated: "The last few years have seen an increasing awareness of and need to measure both market and investment performance.
In Pakistan, we lacked a performance benchmark for fixed income securities, and in particular, for Government Bonds. For this reason, BMA Capital Research was compelled to embrace the challenge and we are now proud to launch this benchmark for institutional investors including commercial banks, asset management companies, insurance companies and pension fund managers. BMA has been working to create the Index as a means of helping the investment community to focus on measurement of performance and risk."
Index Analyst, Aneel Kanwer stated, "There is a huge potential for researchers in this market especially when it's undergoing enormous developmental changes. We see this as a first step in offering a broader menu of performance benchmarks for institutional money managers, including a liquid government bond index based on the zero coupon yield curve. BMA Pakistan Government Bond Index weighted by market capitalisation reflects the market performance, on a total return basis of all bonds issued by Government of Pakistan. The BMA PGBI is first of its kind in Pakistan. This index was made possible through a team effort at BMA and other international specialists.