Foreign flows into Asian bonds turned positive in October, in stark contrast to the sharp outflows faced by equity markets due to slowing earnings and concerns over trade.
Data from central banks and bond market associations showed overseas investors bought a net $2.24 billion in Malaysian, Thai, Indonesian, South Korean and Indian bonds in the last month. That compared with net outflows of $2.46 billion in September.
Malaysia's bond market led the region with inflows of $1.8 billion in October, the highest in 2018. At the end of last month, foreign ownership of Malaysian government securities rose to 40.7% from 39.5% in September, the data showed.
Thailand and Indonesian bond markets also attracted foreign money of $1.07 billion and $886 million, respectively.
"Thailand’s large current account surplus and growth recovery have boosted the perception of Thai debt as a relative safe haven in the region," said Khoon Goh, Singapore-based head of Asia research for ANZ Banking Group in a note.
"Meanwhile, Bank Indonesia’s aggressive interest rate hikes this year and the proactive measures taken by the Indonesian government to stabilise the rupiah are bearing fruit."
On the other hand, foreigners sold $1.35 billion worth of Indian bonds and 240 million worth of South Korean bonds in the last month.