JPMorgan Chase will remove the United Arab Emirates from its widely tracked emerging-market bond indexes by June after the Gulf nation exceeded the bank’s income eligibility thresholds, Bloomberg reported.
The New York-based lender said it will phase the UAE out of the indexes in four stages starting March 31, citing the country’s sustained rise in income levels beyond its criteria for three consecutive years.
The decision reflects the UAE’s higher per capita income and cost of living, which JPMorgan said now align more closely with developed-market standards.
According to Bloomberg, the UAE’s gross domestic product per capita reached nearly $54,000 in 2024.
Index impact
JPMorgan’s Emerging Markets Bond Index Global Diversified is closely followed by global investors and governments, serving as a key benchmark for exposure to emerging-market debt. Inclusion in the index can help countries broaden their investor base and lower borrowing costs.
The UAE currently accounts for about 4.1% of the index. Its removal is expected to affect the weighting and valuation of other countries’ bonds included in the benchmark.
JPMorgan index analysts estimate that once the UAE’s exclusion is complete, the headline spread on the Emerging Markets Bond Index Global Diversified will widen by about 10 basis points, or 0.1 percentage point. The headline spread, sometimes referred to as the “spread to worst,” represents the average weighted spread across the index. A wider spread generally signals higher trading costs and borrowing premiums.
Regional context
The move comes amid a widening economic gap across the Middle East, as oil-rich Gulf states grow wealthier relative to other countries in the region.
Last year, JPMorgan removed Kuwait and Qatar from its emerging-market bond benchmarks for similar reasons.
Several Gulf nations, including Bahrain, Oman, Saudi Arabia, Kuwait and Qatar, were added to JPMorgan’s emerging-market bond indexes in 2018.
In September, Saudi Arabia was placed on the bank’s Emerging Markets Bond Index Watchlist, reflecting efforts to deepen market liquidity and expand global investor participation, including through Islamic bonds and other debt instruments.
In an October interview with Saudi broadcaster Al Arabiya, JPMorgan Chase CEO Jamie Dimon praised Saudi Arabia’s economic transformation and expanding role in global finance, calling the kingdom and the broader Gulf region central to the bank’s long-term strategy.
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