Global funds cool off on emerging market Asian bonds as hedging costs rise

Malaysian bonds have seen a net foreign bond outflow of US$263mil in the first two months of the year. — Reuters

Singapore: Foreign investors are turning cautious on emerging Asian bonds as the rising cost of hedging eats into returns.

Their waning global interest in the region’s local-currency bonds is evident in markets like South Korea and Malaysia where inflows have either reversed or slowed.