Indonesia’s Bonds Are No Longer Darlings in Emerging Markets
- Their holdings of rupiah bonds plummets to 15% of outstanding
- Brandywine wants Indonesia yields to be around 300bps over US
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Foreign investors are setting the bar high when it comes to buying Indonesian bonds, as debt from other regions starts to look more attractive.
Yields on Indonesia’s benchmark sovereign bonds need to rise to 7.5%, which is around 80 basis points higher than where they are now, say JPMorgan Asset Management and First Sentier Investors. Brandywine Global Investment says yields may have to be at least 300 basis points above their US equivalent, compared with the current spread of around 200 basis points.