Foreign buying of emerging Asian bonds in 2018 fell sharply
Jan 18 (Reuters) - Foreign purchases of bonds issued in five
Asian markets in 2018 fell sharply from the previous year, data
shows, as the Sino-U.S. trade war and higher U.S. yields
prompted many investors to shy away from riskier assets.
Data from central banks and bond market associations showed
overseas investors bought a net $10.02 billion in Indonesian,
Thai, South Korean, Indian and Malaysian bonds in 2018, compared
with $49 billion in 2017.
In December, South Korea and Indian bonds had the biggest
inflows among the five countries, of $1.33 billion and $676
However, cumulative flows for India and Malaysian bonds in
full-year 2018 were negative, the data showed.
U.S. Treasury yields surged last year on the back of four
rate hikes by the Federal Reserve, narrowing the interest rate
gap between some high yielding Asian bonds and U.S. ones.
Khoon Goh, head of Asia research at ANZ, said U.S.-China
trade tensions, Fed rate hikes, wider emerging market concerns,
a mid-year spike in oil prices and concerns over global growth
were all headwinds impacting flows into Asia bonds last year.
"How these and other developments play out in 2019 will be
key to whether portfolio inflows will return," he said.
(Reporting by Patturaja Murugaboopathy and Gaurav Dogra;)
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