Hunt for Real Yields May Drive Investors Into Asian Bonds
- Low real rates in U.S. seen spurring investment flows to Asia
- HSBC says Indonesian sovereign debt is a ‘clear stand-out’
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A slump in real yields on U.S. Treasury bonds is set to stoke demand for Asian government debt as the search for income forces investors to take on more risk.
Ten-year government yields, adjusted for expected inflation in 2021, are positive in Indonesia, India, China, Thailand, Malaysia and South Korea, according to HSBC Holdings Plc. For the U.S., which has a developed inflation-protected securities market, the comparable real yield fell to a record low of minus 1.12% this month, reflecting loose monetary policy and the belief that America’s recovery from the pandemic will spur consumer prices.