Foreigners remain net buyers of Asian bonds for eleventh straight month in April

Foreigners remain net buyers of Asian bonds for eleventh straight month in April

© Reuters. FILE PHOTO: A man stands in front of an electronic board displaying stock information at a brokerage firm in Hangzhou, Zhejiang province, China April 1, 2019. Picture taken April 1, 2019. REUTERS/Stringer

(Reuters) – Foreign investors remained net buyers of Asian bonds for eleventh consecutive month in April, as a rebound in regional economic activity and a drop in U.S. yields boosted sentiment.

Overseas investors bought a net $6.37 billion worth of Asian bonds last month, data from regulatory authorities and bond market associations showed. But, the inflows dipped slightly from March as investors turned cautious due to rising COVID-19 cases in the region.

“The pullback in US 10Y bond yields last month eased some selling pressure on Asian asset markets,” said Khoon Goh, head of Asia Research at ANZ in a report.

Graphic: Foreign flows into Asian bonds:

Indonesian bonds attracted inflows for the first time in three months, bagging $914 million, as its factory activity accelerated last month.

South Korean bonds received $3 billion worth of inflows last month, while Malaysian and Thai bonds got $1.5 billion and $926 million respectively.

Cross-border investors sold a net $18 million worth of Indian bonds last month, marking a fourth straight month of outflows, with the country grappling with a surge in coronavirus infections and deaths.

Most analysts said the outlook for bond inflows would hinge on the pace of vaccine distribution and how fast the region recovers from the pandemic.

“Total returns for local currency govvies are getting smaller as investors ponder two risks – a resurgence of COVID-19 in Asia and the prospect of elevated inflation in the United States,” said Eugene Leow, strategist at DBS Bank said in a report.

“Without a high enough proportion of the population vaccinated, there will also always be risks of another COVID-19 wave.”

Graphic: Change in 10 yr government bond yields:

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Category Latest Posts