BENGALURU: Overseas investors were net buyers of Asian bonds for a fifth successive month in September as hopes grew that the United States and China would agree a trade deal soon after officials deemed their talks so far “productive”.
Asian bonds received a combined net inflow of US$2.13bil last month, about 19% higher than August, data from regional banks and bond market associations in Indonesia, Malaysia, Thailand, South Korea and India showed.
Overseas investors purchased US$1.4bil worth of Indonesian bonds in September, the highest in the region, lured by higher yields.
South Korean bonds attracted US$1.18bil in foreign money buoyed by a stronger won, which gained 1.25% last month.
Malaysian bonds attracted US$217mil in inflows.
On the other hand, Thai and Indian bonds faced outflows of US$518mil and US$145mil respectively.
US President Donald Trump outlined last Friday the first phase of a deal to end a trade war with China and suspended a threatened tariff hike on US$250bil in Chinese imports.
“An agreement, even if it is partial, is still a welcome development, ” said Khoon Goh, head of Asia research at ANZ in Singapore.“There is still a need for continued monetary and policy support until there is more confidence that economic growth is starting to recover and that the worst of the trade war is really behind us.” — Reuters