Dec 15 : Foreign traders snapped up Asian bonds in November as they sought shelter from an fairness market selloff pushed by issues over stretched tech valuations and uncertainty across the U.S. Federal Reserve’s fee outlook.
They purchased a web $10.86 billion of bonds in South Korea, Thailand, Malaysia, India and Indonesia in November, marking their largest month-to-month web buy since $15.29 billion of inflows in May, knowledge from native regulatory authorities and bond market associations confirmed.
“Divergence between equity and debt assets emerged again in November, likely due to investors rotating to low-risk assets,” mentioned Khoon Goh, the top of Asia analysis at ANZ.
South Korean bonds drew $11.08 billion, the biggest month-to-month web influx since not less than 2016, on optimism over their inclusion within the FTSE World Government Bond Index beginning in April 2026.
“We suspect that part of the strong inflows into South Korean bonds were diverted from the equity market,” ANZ’s Goh mentioned.
Thai bonds recorded a 3rd consecutive month of international inflows, totalling $319 million, whereas Malaysian bonds noticed web international purchases of $316 million.
In distinction, international traders bought Indian and Indonesian bonds value $447 million and $400 million, respectively.
The U.S. Federal Reserve final week reduce rates of interest by 25 foundation factors to a 3.50 per cent–3.75 per cent vary, reinforcing expectations that decrease U.S. borrowing prices would help regional belongings.
Jonathan Davis, portfolio supervisor at PineBridge Investments, mentioned that as fairness valuations climb alongside lingering macro uncertainty, traders ought to stay targeted on core mounted earnings and conscious of threat focus in additional indebted issuers.
“That is why we see a growing number of institutions looking toward the Asia-Pacific dollar bond market to maintain stability and diversify risks within their core fixed income portfolios.”