Rupiah sovereign notes reeled in US$467mil on Monday, the largest one-day inflow since August 2021, government data show. — Reuters
NEW YORK: Global funds have just scooped up the most Indonesian bonds in over a year, in a move that may yet signal a revival of interest in emerging Asian debt.
Rupiah sovereign notes reeled in US$467mil (RM2bil) on Monday, the largest one-day inflow since August 2021, government data showed. This came on the heels of US$1.5bil (RM6.6bil) of purchases in November, which was the most in three years.
Indonesian bonds are a barometer of risk appetite, and the demand reflects the improving macroeconomic outlook as the US Federal Reserve (Fed) signals a slower pace of rate hikes.
A relaxation of the strict and widespread Covid curbs in China and the easing of price pressures in the region also provide scope for developing Asian securities to outperform.
“We see room for global emerging market (EM) bond funds to extend their position in the Indonesian bond market if we have a more durable improvement in the global risk backdrop,” said Jennifer Kusuma, a senior rates strategist at Australia and New Zealand Banking Group Ltd.
“Flows data suggest that global exposure to EM local markets has decreased this year so far.”
Money managers pulled US$10.2bil (RM44.8bil) from Indonesian debt in the first 10 months of this year, a record for the period, according to data compiled by Bloomberg going back to 2010. — Bloomberg
