(Bloomberg) -- FTSE Russell said Portugal would be added to a key government bond index and held off on a decision on South Korea and India for at least six more months. 

The index provider will add Portugal to the FTSE World Government Bond Index effective November, noting upgrades to its credit rating in recent months, and remove Switzerland from the upgrade watch list. 

South Korea, meanwhile, continues to stay on the watch list for inclusion to the FTSE global bond index — and India for the emerging-market equivalent — once more delaying the countries’ addition to the key gauges.

FTSE Russell “will continue to monitor the positive developments in the South Korean government bond market towards the successful fulfillment” of the criteria, FTSE said in the statement on Wednesday after markets closed in New York. 

It also acknowledged progress in “the accessibility of the Indian government bond market,” but said the market still doesn’t satisfy certain criteria. 

South Korea has been keen to get the index upgrade since FTSE added the country to its watch list for potential inclusion in September 2022. The move is expected to draw as much as 90 trillion won ($66.7 billion), according to the Korean government, citing estimates from investment banks.

Korean authorities have been intensifying efforts to improve the country’s market systems to court more foreign investors, most recently letting some global investors participate in the local interbank currency market. The government is also testing out extended trading hours of the local won market, ahead of its official extension due in July.

Meanwhile, India still doesn’t meet criteria including increased regulatory reporting and the tax clearance process, FTSE said. Both countries were not included on the indexes when they were last reviewed in September, 2023.

The provider said Switzerland was removed from an upgrade watch list after a tax reform stalled. 

Read More: JPMorgan Will Add Indian Bonds to Key Index, Luring Global Funds

FTSE Russell’s decision highlights the hurdles some investors continue to face in accessing India’s bond market, even as the nation’s debt is set to get added to JPMorgan’s flagship emerging markets gauge starting in June. Others have been piling in though, with inflows to the nation’s bonds helping make it one of the top performers in local currency emerging market debt this year.

Vietnam, Pakistan

On the equities side, FTSE Russell said it will keep Vietnam’s status as a frontier market unchanged. While it highlighted the country’s “resolute” drive, the index provider said it needs to see more improvements in access to the local equity market and issues around settlement of trades. 

Read More: Vietnam Seeks More IPOs, Share Sales to Boost Its Stock Market

The country was added to the watch list in September 2018 for possible reclassification to secondary emerging markets, but the index compiler had said its progress has been slower than anticipated, in part due to Covid. A pre-funding requirement is the key hurdle to an upgrade, investors say.

The index compiler also retained Pakistan on the watch list for potential demotion to frontier market status from secondary emerging market amid a steady decline in its index weight over the past few years.

Bloomberg LP is the parent company of Bloomberg Index Services Ltd., which administers indexes that compete with those from other service providers.

--With assistance from Zijia Song, Masaki Kondo and Catherine Bosley.

(Updates with reasons for Portugal, Switzerland decisions from first paragraph)

©2024 Bloomberg L.P.