Markit has launched seven new country-specific indices, which an analyst said means that every country with a covered bond benchmark will have its own index, increasing visibility for issuance from these seven jurisdictions.

The countries for which the new indices are being launched are Australia, Belgium, Denmark, Finland, Luxembourg and New Zealand, taking to 20 the total number of countries with dedicated indices. The indices take in all the covered bonds in Markit’s iBoxx EUR Benchmark index that are classified as “other covered”, and this sub-index was discontinued on 30 April, when the new indices were launched.

In total there are 28 new Bid and Mid price indices, one each for Markit’s Total Return and Clean Price indices.

Markit will review the covered bond universe on a quarterly basis and will create a country covered index if a covered bond is issued in an additional country.

A covered bond analyst said that he welcomes the new indices for accommodating the strongly increased regional diversity of the covered bond market.

“The new scheme will increase market visibility of the covered bonds from their respective countries and will also be positive for investment considerations from a relative value perspective,” he said.

He flagged some shortcomings, such as that there are some indices consisting of only one issuer (Denmark) or just one bond (Canada, Luxembourg), and said that the conclusions that can be drawn from such indices are therefore negligible, but said that the indices are aimed at investment professionals who are aware of the weaknesses and that there were uncertainties under the old index rules, too.