Halister News

(Bloomberg) -- Demand for EM Asian bonds continues to be strong, with inflows surpassing 5-year highs in some markets, despite broad-based stock outflows, Rohit Garg, a strategist at Bank of America Merrill Lynch, writes in report.

• Pickup in positive economic surprises, inflation remaining subdued, expectations of more easing by India and Indonesia, and USD weakness supporting risk sentiment, he writes
• U.S. bank favors 15-yr Indonesian bonds, targeting 6.8% yield especially after recent rally in IDR
• Likes 6-yr India govt notes; INR may climb further against USD after USD/INR dropped below 64 last week
• Co. sees MYR rising to 4.1/USD in coming weeks as exporters may be rushing to sell USD after break of some critical levels; suggests investing in 7-yr to 10-yr bonds
  • MYR could be next to rally due in part to possibility of early elections, lower bond yields due to net negative bond issuance
• Co. sees THB underperforming after central bank increased offshore investment limit; also wary of chasing rally in CNH after PBOC move on forwards
• Co. also continues to like long JPY/KRW to position for the ongoing geopolitical tensions in the Korean peninsula
• READ: Record Inflows Just the Start for Asia’s Highest Yield Debt

To contact the reporter on this story: Lilian Karunungan in Singapore at lkarunungan@bloomberg.net To contact the editors responsible for this story: Tomoko Yamazaki at tyamazaki@bloomberg.net Andrew Janes