Billion-Dollar Outflow Seen as Blip by India Bulls Chasing Yield
- India remains ‘sweet spot’ in emerging markets: Western Asset
- Longest run of foreign outflows in three years linked to Fed
This article is for subscribers only.
Western Asset Management Co. and HSBC Holdings Plc say the longest stretch of foreign fund outflows in three years shouldn’t be taken as a sign of waning appetite for Indian bonds.
The two firms are bullish on rupee-denominated debt, with HSBC saying the withdrawals, which resulted from a broader emerging-market selloff, won’t be sustained given the global hunt for yield amid near-zero interest rates in developed nations. Benchmark 10-year sovereign notes in India pay 7.46 percent, the highest among major Asian markets after Indonesia. That compares with 1.85 percent for Treasuries and a negative yield in Japan.