Asian bonds see foreign inflows for fourth straight month

Asian bonds recorded net foreign inflows for a fourth straight month in June, supported by expectations of less aggressive monetary tightening measures from the U.S. Federal Reserve and easing local inflationary pressures.

Foreigners purchased a net $4.24 billion worth of bonds in India, Indonesia, Malaysia, South Korea and Thailand, data from regulatory authorities and bond market associations showed. However, it was lower than May's about $10.1 billion net inflows.

South Korean bonds received $1.56 billion, the most among Asian peers, while Indian bonds drew $1.1 billion.


Foreigners purchased about $1.2 billion worth of Indonesian bonds and $1.1 billion of Malaysian bonds. However, they sold about $757 million worth of Thai debt.

The Fed kept interest rates steady last month after 10 consecutive hikes, but indicated the likelihood of two small increases by year-end to address inflation concerns.

Inflation across the Asian region has been relatively well contained as compared to developed-world counterparts, said Murray Collis, chief investment officer for Asia fixed income at Manulife Investment Management.

"Asian central banks are in a relatively good position to hold monetary policy steady or even move to an accommodative stance in the coming quarters," he said.

"Within the Asian fixed income markets, we see opportunities, particularly in the short-dated Asian investment grade bonds which currently offer compelling valuations."

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Subhranshu Sahu)