Seoul faces a chicken and egg problem. Seeking to become an “advanced market”, South Korea wants its treasury bonds to be included in an important Citigroup index, a move that should usher billions of dollars of vital liquidity into the market.
But Citigroup’s Index Steering Committee is not yet convinced that South Korea’s bond market is sufficiently developed or liquid to merit that place in its World Government Bond Index, tracked by heavyweight investors such as Japanese pension funds.
