J.P. Morgan launches the first comprehensive South Africa Bond Index.

NEW YORK--(BUSINESS WIRE)--February 8, 1995--J.P. Morgan (NYSE:JPM) today introduced the J.P. Morgan South Africa Bond Index (SABI) -- the first index to track the market for liquid rand-denominated South African bonds for international investors.

The index tracks total return from both a U.S. dollar and rand perspective, taking into account South Africa's dual exchange rate system and local regulations.

The SABI currently includes 16 issues with face value outstanding of $36 billion, out of a total market outstanding of approximately $77 billion (face value). The index is comprised of Republic of South Africa bonds (68%) and three parastatal issuers (32%). All bonds included in the index are actively quoted to international investors.

The SABI tracks returns from June 30, 1994. "The SABI is an excellent tool for international investors to measure total U.S. dollar and rand return performance in South Africa's domestic bond market," said Jeanne Feldhusen, managing director and head of Morgan's Emerging Markets Research group. "Until now, international investors have not had a comprehensive benchmark for monitoring liquid rand-denominated South African bonds."

The South African bond market has been one of the best performing fixed income markets in recent months. On a U.S. dollar basis, the index has returned 16.4% in the seven months since its inception through January 31, 1995, outperforming the J.P. Morgan Emerging Markets Bond Index return of -1.95% over the same period. Annualized volatility of 17.8% was less than the Emerging Market Bond Index volatility of 29.1%.

The SABI was constructed using a methodology adapted from the J.P. Morgan Government Bond Index. The objective was to create a benchmark that accurately reflected the total dollar and rand returns on a portfolio of bonds actively quoted to international investors. J.P. Morgan will publish the SABI monthly with performance commentary.

Expanded South African research

As part of J.P. Morgan's continued commitment to analyze the South African market, the firm also introduced last week expanded coverage of the South Africa bond and foreign exchange markets in its regular weekly publication, Emerging Markets Outlook. -0-

For more information about the SABI or J.P. Morgan's expanded research coverage of the South Africa market, please contact one of the individuals listed below.

CONTACT: J.P. Morgan & Co. Incorporated, London

Emerging Markets - Elaine Small, 071-325-0669

Press Relations - Joseph Evangelisti, 071-325-4289

or

J.P. Morgan & Co. Incorporated, New York 

Emerging Markets - Santosh Kurup, 212-648-1938

Press Relations - Margaret Southerland, 212-648-7955