Foreign flows into Asian bonds turn positive, Malaysia leads
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Foreign flows into Asian bonds turned positive in October, in stark contrast to the sharp outflows faced by equity markets due to slowing earnings and concerns over trade. Data from central banks and bond market associations showed overseas investors bought a net US$2.24 billion (RM9.4 billion) in Malaysian, Thai, Indonesian, South Korean and Indian bonds in the last month. That compared with net outflows of US$2.46 billion in September.
Malaysia’s bond market led the region with inflows of US$1.8 billion in October, the highest in 2018. At the end of last month, foreign ownership of Malaysian government securities rose to 40.7% from 39.5% in September, the data showed.
Thailand and Indonesian bond markets also attracted foreign money of US$1.07 billion and US$886 million, respectively.
“Thailand’s large current account surplus and growth recovery have boosted the perception of Thai debt as a relative safe haven in the region,” said Khoon Goh, Singapore-based head of Asia research for ANZ Banking Group in a note.
Questions & Answers
Q.Which specific Asian bond markets saw foreign investment inflows in October?
Which specific Asian bond markets saw foreign investment inflows in October?
Overseas investors bought bonds in Malaysia, Thailand, Indonesia, South Korea, and India during October. This marked a positive shift compared to the previous month's net outflows across the region.
Q.How did the total foreign investment in Asian bonds in October compare to September?
How did the total foreign investment in Asian bonds in October compare to September?
Foreign flows into Asian bonds turned positive in October with a net US$2.24 billion inflow. This contrasted sharply with net outflows of US$2.46 billion that were recorded in September.
Q.What is cited as a reason for the increased foreign interest in Thai debt?
What is cited as a reason for the increased foreign interest in Thai debt?
Thailand's substantial current account surplus and its ongoing growth recovery have enhanced its appeal. These factors have contributed to the perception of Thai debt as a relatively safe investment within the region.
Q.What was the foreign ownership percentage of Malaysian government securities at the end of October?
What was the foreign ownership percentage of Malaysian government securities at the end of October?
Foreign ownership of Malaysian government securities increased to 40.7% at the end of October. This figure represents an increase from the 39.5% recorded at the close of September.
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