Close Menu
Fund Focus News
    Facebook X (Twitter) Instagram
    Trending
    • As profits soar, PB Fintech takes a second bite at mutual funds
    • InvITs vs mutual funds: Who should invest and when
    • Mutual Funds: 10 new fund offers (NFOs) open for subscription in August—should you invest?
    • Best Motilal Oswal funds: Top 5 schemes with up to 124% absolute returns in 3 years; No.1 fund grows money over 4 times in 5 years – Money News
    • Quant MF to launch India’s first long-short SIF fund — know the name and how it works – Money News
    • Kazakhstan Quadruples Environmental Investments in First Half of 2025
    • Zerodha’s Nithin Kamath is championing low-cost index funds for greater wealth creation; but is he right?
    • SEBI directs brokers, mutual funds to make digital platforms accessible for people with disabilities
    Facebook X (Twitter) Instagram
    Fund Focus News
    • Home
    • Bonds
    • ETFs
    • Funds
    • Investments
    • Mutual Funds
    • Property Investments
    • SIP
    Fund Focus News
    Home»Bonds»Global Investors Push Indonesia Bond-Buy Streak Into Sixth Month
    Bonds

    Global Investors Push Indonesia Bond-Buy Streak Into Sixth Month

    October 31, 2024


    (Bloomberg) — Foreign investors are piling into Indonesian sovereign bonds, drawn by the new president’s signals for fiscal discipline and their appetite for emerging market alternatives given US election-related volatility.

    Most Read from Bloomberg

    The country’s manageable inflation and its central bank’s surprising September rate cut to spur growth also helped sustain demand. Offshore funds snapped up rupiah bonds for a sixth straight month in October, the longest buying spree since 2017, according to data compiled by Bloomberg.

    Indonesian bonds’ price dip in October after five straight months of gains — as they tracked US Treasuries and a bond selloff worldwide — did little to stop foreign investors’ buying streak. A key Indonesian bond gauge has returned about 5% since the streak began at the start of May, outperforming most Southeast Asian peers.

    The inflows suggest that high yields in more stable Asian emerging markets remain drawcards for investors gearing up for uncertainties from the Federal Reserve’s rate path in a robust US economy and the prospect of a trade war after the Nov. 5 election.

    “Real yields remain attractive, adding to the allure of high nominal yields relative to regional peers,” said Philip McNicholas, Asia sovereign strategist at Robeco Group in Singapore. “Moreover, the relative political stability and continuity Indonesia is showing sets it apart from its high-yielding global peers.”

    The new administration’s maneuvers remain key variables for Indonesia investors. President Prabowo Subianto’s decision to retain Finance Minister Sri Mulyani Indrawati in his new cabinet was widely seen as a signal of policy continuity and a conservative fiscal approach.

    The government also has since announced a target deficit that is below the legal cap, helping to ease concerns that arose after Prabowo touted some of his spending plans earlier this year.

    “The reform continuity and relative US elections buffer is a story that investors might be inclined to buy into, especially as US fiscal risks – perceived or otherwise – check unbridled optimism for buying into US carry,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank Ltd. in Singapore. “The ‘Indrawati trade’ so to speak is also a fiscal positive at the margin that is supportive, all else equal.”

    But signs are emerging that investors’ zeal may not be sustained, particularly as the dollar and Treasury yields climb.

    Demand for rupiah bonds at a primary auction on Tuesday fell to the lowest in a year, pushing yields on 10-year bonds to their highest since Aug. 1. Foreign investors trimmed their holdings by $85 million last week, the first weekly net outflow since July, according to data compiled by Bloomberg.

    The repricing in expectations for the Fed’s pace of rate cuts and a stronger dollar are likely to blame for Indonesian government bonds’ decline in October, said Aditya Sharma, an emerging markets strategist at Natwest Markets in India.

    Bond market pressures also may arise from Bank Indonesia possibly delaying further cuts to support the rupiah if the currency underperforms, he said. The rupiah weakened 3.6% to 15,713 per dollar in October, its biggest monthly drop since March 2020.

    Still, foreigners’ positioning in Indonesian government bonds is low compared to the historical average, and premium offered over US Treasuries could rise and make the notes more attractive, Sharma noted. “There is scope for positioning to improve.”

    (Updates with rupiah move in 12th paragraph.)

    Most Read from Bloomberg Businessweek

    ©2024 Bloomberg L.P.



    Source link

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Telegram Email

    Related Posts

    Should UK-based clients still own US government bonds? 

    August 1, 2025

    Japanese bonds log weekly foreign outflows on BOJ policy caution

    July 30, 2025

    What Are Bonds? A Beginner’s Guide (2025)

    July 30, 2025
    Leave A Reply Cancel Reply

    Top Posts

    As profits soar, PB Fintech takes a second bite at mutual funds

    August 1, 2025

    Qu’est-ce qu’un green bond ?

    December 7, 2017

    les cat’ bonds deviennent incontournables

    September 5, 2018

    ETF : définition et intérêt des trackers

    May 15, 2019
    Don't Miss
    Mutual Funds

    As profits soar, PB Fintech takes a second bite at mutual funds

    August 1, 2025

    This is PB Fintech’s second attempt at entering the mutual fund business. The first, launched…

    InvITs vs mutual funds: Who should invest and when

    August 1, 2025

    Mutual Funds: 10 new fund offers (NFOs) open for subscription in August—should you invest?

    August 1, 2025

    Best Motilal Oswal funds: Top 5 schemes with up to 124% absolute returns in 3 years; No.1 fund grows money over 4 times in 5 years – Money News

    August 1, 2025
    Stay In Touch
    • Facebook
    • Twitter
    • Pinterest
    • Instagram
    • YouTube
    • Vimeo
    EDITOR'S PICK

    Goldman Sachs targets leading role in active ETFs in Europe

    February 14, 2025

    Hotel Property Investments Posts Stable Growth

    August 21, 2024

    Pourquoi le kangourou saute-t-il ? Des chercheurs pensent avoir enfin trouvé la réponse

    March 20, 2025
    Our Picks

    As profits soar, PB Fintech takes a second bite at mutual funds

    August 1, 2025

    InvITs vs mutual funds: Who should invest and when

    August 1, 2025

    Mutual Funds: 10 new fund offers (NFOs) open for subscription in August—should you invest?

    August 1, 2025
    Most Popular

    ₹10,000 monthly SIP in this debt mutual fund has grown to over ₹70 lakh in 23 years

    June 13, 2025

    ₹1 lakh investment in these 2 ELSS mutual funds at launch would have grown to over ₹5 lakh. Check details

    April 25, 2025

    ZIG, BUZZ, NANC, and KRUZ

    October 11, 2024
    © 2025 Fund Focus News
    • Get In Touch
    • Privacy Policy
    • Terms and Conditions

    Type above and press Enter to search. Press Esc to cancel.