Oct 19 (Reuters) - Foreigners were net buyers of Asian bonds
for a sixteenth consecutive month in September, though the
inflows were capped on worries over higher inflation levels and
chances of a hawkish shift in major central banks' policy
Overseas investors purchased a combined net total of $3.64
billion in Indonesian, Malaysian, South Korean, Thai and Indian
bonds last month, compared with net buying of $7.39 billion in
August, data from regulatory authorities and bond market
"Bond inflows into Asia moderated in September compared to
August, on expectations that Fed tapering is drawing closer
which made investors more cautious about buying EM debt," said
Khoon Goh, head of Asian research at ANZ.
Leading regional inflows, South Korean bonds received $4.37
billion, which marked a ninth straight month of inflow, while
Indian bonds received a net $1.74 billion.
Both South Korea and India witnessed an expansion in
business activity last month.
Some analysts said a healthy fiscal position supported
inflows into Indian bonds.
Nomura lowered India's fiscal deficit estimate for the
fiscal year ending 2022 to 6.2% of GDP from its earlier
projection of 6.8%, citing stronger revenues and lower
HSBC analysts last week estimated that India's government
bonds are likely to gain inclusion in global indexes in 2022,
bringing potential inflows of between $30 billion and $40
billion, which could be a positive sign for bond purchase in
Malaysian bonds received $154 million last month, however,
the inflows were much lesser than in August.
Last week, the Malaysian government lifted COVID-19 related
travel restrictions for fully vaccinated residents, giving more
confidence to investors for a quick economic
Meanwhile, Thailand and Indonesia faced foreign outflows of
about $1.3 billion each.
"Concerns over higher borrowing plans in Thailand
contributed to the outflows seen from the Thai bond market,"
said ANZ's Goh.
Last month, the Thai government raised the debt ceiling to
70% of gross domestic product (GDP) from 60%, allowing it to
raise more funds to help a flagging economy.
(Reporting by Gaurav Dogra and Anurag Maan in Bengaluru;
editing by Uttaresh.V)