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JPMorgan Chase & Co. will cut the weight of the largest bond issuers in its flagship emerging-market index, diverting investor flows from the likes of China and India toward smaller nations. 

The Wall Street bank will gradually lower the issuer cap on its GBI-EM Global Diversified index in the first half of 2026, according to a client notice seen by Bloomberg. The limit will fall to 9% from 10% currently, with the implementation to be phased over a period of several months, the documents dated Friday said.

The weighting reduction will affect some of the largest bond sellers in emerging markets, including Indonesia, Mexico and Malaysia, as well as China and India. Thailand, Poland, South Africa and Brazil are among the biggest beneficiaries.

“Investors highlighted the benefits of lowering the diversification threshold to 9%, with a more balanced regional exposure that decreases the concentration risk and enhances the headline index yield,” the client notice said. “Investors were supportive of evaluating the suitability of further reductions in the country cap.”

Market reaction to the news was muted in Asia, with Malaysia closed for a holiday. China’s government bonds edged lower, mainly on better risk sentiment ahead of a call between President Donald Trump and his Chinese counterpart Xi Jinping on Friday.

Becky Liu, head of China macro strategy at Standard Chartered Bank, expects the index change to have a limited impact on Chinese bonds. She estimates the potential outflow from move to be around $2 billion, which is tiny compared with the total foreign holdings of Chinese onshore bonds of about $560 billion.

Global index-based investors have been underweight Chinese government bonds in recent years due to low yields, Liu said. “A further small reduction of index weighting will unlikely lead to much positioning adjustments from here on.”

A JPMorgan spokesperson declined to comment. Bloomberg reported the bank had been soliciting feedback from clients on a change to the issuer cap earlier this year.

JPMorgan’s index is the main benchmark for developing-nation debt and followed by funds managing over $200 billion. Changes to its composition impact global investment flows, such as when Chinese bonds were phased into the benchmark in 2020 and when Indian debt was added last year.

On Friday, JPMorgan also placed Saudi Arabia and the Philippines on watch for possible inclusion into the benchmark gauge for local debt, citing market reforms implemented by both nations over the past few years. Estimated weightings would be about 2% and 1% respectively if they were added, the bank said.

Bloomberg LP, the parent company of Bloomberg News, also offers index products for various asset classes through Bloomberg Index Services Ltd. –BLOOMBERG

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PHILIPPINE President Ferdinand Marcos Jr.’s cousin stepped down as speaker of the House of Representatives amid allegations of widespread corruption in infrastructure projects that’s fueled public outrage in the Southeast Asian nation.

“I do this so that the independent commission on infrastructure may pursue its mandate freely and fully, without doubt, without interference, without due influence,” Congressman Martin Romualdez  (picture) said on Wednesday.

Romualdez and other House lawmakers have denied allegations of receiving kickbacks from the government’s flood control projects that are worth billions of pesos. “The issues surrounding certain infrastructure projects have raised questions that weigh not only upon me but upon this institution we all serve,” he said.

The newly elected speaker, Faustino Dy III, also a Marcos ally, vowed to clean up their ranks. “Under my leadership this House will change. I will not defend the guilty and I will not shield the corrupt,” Dy said after taking his oath.

The change in the House leadership follows the election of a new head in the Senate as some senators were also implicated in the corruption scandal. They have denied allegations of wrongdoing.

The Marcos administration has toughened its crackdown on graft in government projects to mitigate flooding in one of the world’s most typhoon-prone countries. The public anger has led to pockets of protests mainly in the capital where various groups are planning to stage a major rally on Sunday.

The resignation of Romualdez, one of Marcos’ closest allies, is a response to mounting public anger over corruption and an effort to shield the president’s office from the uproar, according to Ederson Tapia, a professor of public administration at the University of the Philippines.

“It is also a strategic act of self-preservation, insulating the presidency from reputational damage,” Tapia said.

Marcos, who exposed the massive corruption in such projects during his State of the Nation address in July, has said that no one will be exempted, including his relatives and allies, in the probe into the misuse of government funds. He created an independent body last week to investigate the matter. 

The administration looks forward to working with Dy “to advance measures that strengthen the economy, ensure basic services, and protect our democracy,” Marcos’ communications office said.

Earlier in the day, Congressman Lorenz Defensor called the misuse of state funds in the flood alleviation projects “the highest form of plunder.” “The House needs this change, the House needs to rebuild its reputation and regain its integrity,” he told reporters. –BLOOMBERG

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CHINA’S internet watchdog has instructed companies including Alibaba Group Holding Ltd. and ByteDance Ltd. to terminate orders for Nvidia Corp.’s RTX Pro 6000D, the Financial Times reported, citing people with knowledge of the matter.

The Cyberspace Administration of China told companies this week to stop testing the chip and cancel existing orders, the FT reported. Before that diktat, several companies indicated they would order tens of thousands of the product, which Nvidia introduced to get around restrictions on the shipment of advanced AI chips to China, the FT said.

Such a move would mark an escalation of Beijing’s campaign against the use of Nvidia’s accelerators, essential to AI development but largely banned from the world’s largest semiconductor arena. It would follow instructions handed down over the summer pushing firms to avoid using the H20, the lower-end chip that the Trump administration this year decided to allow Nvidia to ship to China.  

Shares in Nvidia erased premarket gains to fall 1%, while rival Advanced Micro Devices Inc. slipped about 0.7%.

Nvidia has found itself thrust into the center of delicate negotiations between Beijing and Washington this year, because of its central role in driving future technologies including artificial intelligence. The company dominates the market for the chips essential to building and operating AI services at companies ranging from Meta Platforms Inc. to DeepSeek.

This week, China ruled that Nvidia violated anti-monopoly laws with the $7 billion 2020 acquisition of Mellanox Technologies Ltd., ratcheting up the pressure on US companies. Days before that, Beijing also said it was launching an antidumping investigation targeting a type of semiconductor made by US companies such as Texas Instruments Inc. 

“China clearly prefers to develop AI at its own pace on a domestic tech stack. Better to bite the bullet now than to rely on US tech that can be restricted upon a whim,” said Vey-Sern Ling, managing director at Union Bancaire Privee. “A complete ban, if true, would show China’s confidence in its local supply chain somewhat. But still likely it’s a bargaining chip in the trade negotiations.”

President Donald Trump is slated to speak with Chinese leader Xi Jinping on Friday, after the two sides held trade talks in Madrid.

The RTX6000 series chip isn’t regarded as among Nvidia’s marquee products, more of a high-end card designed specifically for the restricted Chinese market. Domestic firms have long coveted Nvidia’s most powerful accelerators, which Washington banned from China for fear they could propel the nation’s broader geopolitical and military ambitions.

Beijing’s regulators made their most recent decision because of a growing feeling that domestic chips have gained in sophistication, the FT reported on Wednesday, citing a person familiar with the matter.

Companies like Alibaba and Baidu Inc., keen to reduce their reliance on foreign chips, are developing their own homegrown alternatives. Alibaba has secured a high-profile customer in China’s No. 2 wireless carrier for its “T-Head” AI chips, suggesting the Chinese tech leader’s nascent semiconductor efforts are gaining traction in its home market. –BLOOMBERG

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