Halister News

(Bloomberg) -- Local-currency Asian debt have room to extend their positive performance due to subdued price pressures and strong capital inflows, according to Invesco Hong Kong Ltd. AllianceBernstein Holding agrees, even as it acknowledged that investors are already very long on EM debt.

• Invesco is bullish on India’s local-currency government bonds as their real interest rates are “very attractive,” says Ken Hu, chief investment officer for Asia-Pacific fixed income in HK
  • RBI may pause in easing as cyclical forces could temporarily push up inflation rates slightly in the near term
  • In the medium to longer term, inflation is likely to remain on a downward trend as India’s strong economic reform momentum will boost productivity growth and depress price pressures
• EM Asian bonds have “become a crowded trade” but the rally still has room to run, says Anthony Chan, an Asian sovereign strategist at AllianceBernstein Holding in Hong Kong
  • Favors local-currency bonds of China, India, Indonesia, South Korea and Sri Lanka
  • Remains cautious on local- currency Malaysian and Philippine debt “despite their relatively attractive yield level as fundamental factors are unlikely to change soon to support an entry strategy”

To contact the reporters on this story: Liau Y-Sing in Kuala Lumpur at yliau@bloomberg.net; Kartik Goyal in Mumbai at kgoyal@bloomberg.net To contact the editors responsible for this story: Nicholas Reynolds at nreynolds2@bloomberg.net Patricia Lui