· Fund flows to emerging markets rose to +USD29.8b in March from +USD17.2b in February with signs of acceleration after the Fed rate hike.

Fixed Income Foreign Flows, Mar 17: Worst Month on Record

·         Fund flows to emerging markets rose to +USD29.8b in March from +USD17.2b in February with signs of acceleration after the Fed rate hike.

·         However, Malaysia had its worst month on record with a net loss of MYR26.2b in March. We think most of the outflows came from foreign banks and asset managers.

·         While additional outflow risk is a valid concern, on the flip side it equally means foreign positioning in domestic bonds has become less of a threat to the country’s external vulnerability.