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Foreign investors net buyers of Asian bonds in Feb

Bengaluru, India

FOREIGNERS turned net buyers of Asian bonds in February, but the flows were uneven as political uncertainty in parts of the region dampened optimism that the United States and China were inching towards a trade deal.

Foreigners bought a net US$1.95 billion worth of bonds last month, after selling US$3.26 billion in January, data from central banks and bond market associations in Malaysia, Thailand, Indonesia, South Korea and India showed.

However, the bulk of the money flowed into Indonesian bonds.

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Foreigners purchased US$2.33 billion worth of Indonesian bonds amid expectations that its central bank may begin easing policy soon after last year's aggressive tightening.

Overseas investors purchased Malaysian bonds for the first time in four months, helped by a stronger ringgit and receding political tensions. They bought US$1.12 billion worth of Malaysian bonds last month.

On the other hand, Indian bonds saw foreign outflows of US$844 million in February as tensions rose after India conducted air strikes against a militant camp in Pakistan territory.

Foreigners have bought US$921 million so far this month, the data showed, on rising hopes that Prime Minister Narendra Modi's party will win coming elections.

Thai bonds saw US$486 million of outflows, as the short-lived entry of the sister of King Maha Vajiralongkorn into politics threw the election into turmoil.

South Korean bonds also faced foreign outflows of US$171 million last month. REUTERS