Yield-Hunt Season Sends Global Debt Funds Flooding Into Korea
- Net inflows into Korean bonds reached a record in June 11 week
- Virus cases, subdued inflation argue against tightening: eBEST
South Korea’s three-year bond yields have jumped back to pre-pandemic levels and climbed 35 basis points this year to around 1.33%
Photographer: SeongJoon Cho/Bloomberg
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Traders are laying bets for South Korea’s interest rates to rise, but the market may have gotten ahead of itself in pricing in the hikes.
That’s the contention of global funds which are seizing the opportunity to pile into listed South Korean bonds. Net purchases swelled to a record $7.1 billion in the week ended June 11, taking inflows for the year to about $55 billion. Attractive returns have also boosted demand.