September 20, 2018 / 8:44 AM / a month ago

Foreigners bought Asian bonds for 2nd month in August despite contagion fears

Sept 20 (Reuters) - Foreigners bought Asian bonds for the second successive month in August, brushing off concerns over Sino-U.S. trade war and fears of contagion from Turkey and other volatile emerging markets.

Data from central banks and bond market associations showed foreigners bought a net $4.57 billion of bonds from India, Indonesia, Thailand, South Korea and Malaysia in the last months, the highest since January.

South Korea bonds led the regional flows last month, attracting about $2.1 billion of foreign money, followed by Thailand which received $1.4 billion.

Indonesia and Indian markets also received inflows of about $1 billion and $500 million, respectively.

On the other hand, Malaysian bonds saw outflows of $579 million in the last month.

Though the region received two consecutive months of bond inflows, analysts expect money flows to remain volatile in coming months due to escalating Sino-U.S. trade tensions and continued policy normalisation by the U.S. Federal Reserve.

Reporting by Patturaja Murugaboopathy and Gaurav Dogra; Editing by Kim Coghill

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