Funds stack in Southeast Asian effects, even at record low yields | Einsmark news

(Bloomberg) investors make a line line for Southeast Asian sovereign effects despite their record low yields amid a move away from US assets and on bets for further interest rate cuts in the region. The average 10-year returns in Southeast Asian countries relative to the US Treasury have dropped to the lowest in data returning to 2011, according to Bloomberg calculations. The effects of the region benefit from investors seeking alternatives to US assets as part of the ‘Sell America’ trade fueled by discomfort over President Donald Trump’s policy. A searching outlook on the dollar offers another wind wind for Southeast Asian effects. It increases the local currencies and opens the door for the central banks of the region to lower interest rates to support their economies without encouraging capital outflow. “Southeast Asian effects will continue to take advantage of a revival of flow away from dollar assets, as the growth and inflation prospects in the region still require more policy support from central banks,” says Eugene Leow, a fixed-income strategist at DBS Bank Ltd. In Singapore. “The tires of the region are also under owned by foreigners, and have plenty of room to grow back to where they were pre-pandemics,” he added. The foreign demand for Southeast Asian bonds was strong this quarter, with Malaysia receiving nearly $ 5 billion during this period amid bets that the country’s central bank, the last interest rate report in the region, would make a move in July. Global funds also dumped $ 1.4 billion and $ 2.4 billion in Thai and Indonesian bonds respectively to put them on track for their largest inflow in at least three -quarters. It is not just the hunt for yields that support Southeast Asian effects, some funds also consider Singapore’s debt as an alternative safe haven for treasury that weighs through concerns about a fancy debt and deficits. “Moody’s ratings of the US Sovereign highlight the relative fiscal health of the AAA rating of Singapore, and I have little doubt that they will continue to attract the interest of more careful Bond investors in the foreseeable future,” says Homin Lee, senior macro strategist in Lombard Odier in Singapore. Singapore’s 10 -year yield is about 2.30%, near the lowest since March 2022. Similar tenor effects in Thailand and Malaysia hang near the lowest levels since September 2021 and December that year. Pin Ru Tan, head of the APAC tariff strategy at HSBC PLC, expects returns in Singapore and Thailand to fall further by the end of the year. She sees that Singapore’s returns are dropping from ten years to 2.20% and the Thai returns of a similar tenor decline to 1.60% of the current level of 1.68%. More stories like these are available on Bloomberg.com © 2025 Bloomberg LP