South Asia bonds to take a further hit

11 Sep 2013

The worst is not over for bonds from deficit countries India, Indonesia and soon Malaysia. Rates will rise and currencies will continue to weaken, entrenching the split between North and South Asia.

Credit spreads across South Asia have scope to widen further as FX deteriorates and rates rise due to structural issues which will continue to deter investors, even as a recovery looks increasingly likely across bond markets in the North of the region.

On the face of it, it looks ...

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