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Asian bonds receive the lowest foreign flows in October by Reuters this year

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© Reuters. FILE PHOTO: US dollars and other world currencies are in a charity receptacle in Toronto, Ontario, Canada, Pearson International Airport, June 13, 2018. REUTERS / Chris Helgren

By the hand of Gaurav Dogra

(Reuters) – Asian bonds received lower foreign earnings this year, higher inflation levels and concerns over a slowdown in the Chinese economy.

Foreign investors bought a net total of $ 2.25 trillion last month in bonds in Indonesia, Malaysia, South Korea, Thailand and India, the lowest purchase since December 2020, according to data from regulatory authorities and bond market associations.

“Sentiments for emerging Asian bonds deteriorated significantly in October, mainly due to the upward blow to the global short-term rate hike,” said Duncan Tan, a strategist at DBS Bank.

“Foreign investors are also concerned about the negative impact of rising energy prices and weaker growth in China on a broader Asian outlook.” External flows to Asian bonds, https://fingfx.thomsonreuters.com/gfx/mkt/gkvlgdlxrpb/Foreign%20flows%20into%20Asian%20bonds.jpg

South Korean bonds continued to receive foreign currency for the 10th consecutive month in October, but revenue of $ 2.14 billion was half of what was collected in September.

South Korean bonds have grossed $ 49.5 trillion this year, with data showing that they account for more than 85% of the money received by the region’s five major markets, the data show.

Malaysian bonds attracted $ 711 million, with revenue coming in for the third month in a row, thanks to high oil prices and hopes that easing coronavirus cuts will boost the economy in the fourth quarter.

Thailand’s bonds received a net gain of $ 480 million, driven by improvements in economic activity and the reopening of the travel sector.

On the other hand, the Indonesia and India bonds, which offer the highest yield in the region, had outflows last month.

The Fed announced last week that it would cut $ 15 billion in monthly bond purchases from November, leaving the option open to speeding up or slowing down as needed.

“The US Federal Reserve has begun to reduce bond purchases, and market expectations have shifted to rate hikes in the second half of 2022,” said Khoon Goh, head of Asia Research at ANZ Bank.

“Changing market prices to earlier rate hikes will lead to market volatility, which will affect portfolio flows to Asia.” Participation of foreign investors in Asian bonds, https://tmsnrt.rs/3kvN8Sq

(Additional report by Patturaja Murugaboopathy in Bengaluru; Rashmi Aich edition)

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