Investors Sour on Emerging-Market Bonds as Dollar Surges

(Bloomberg) -- Investors dumped emerging-market bonds as the rising dollar made the riskier investments less attractive, according to a Jefferies Hong Kong report.

Global investors sold a net $725 million in the debt for the April 19 to 25 period, according to EPFR data compiled by Jefferies strategists Kenneth Chan and Tommy Tang. Investors also sold another $2.4 billion in high-yield debt, extending the year’s selloff to $33 billion.

“EM bonds experienced their largest withdrawals in 10 weeks,” the strategists said in a note to clients.

The Bloomberg Barclays index tracking emerging markets dollar bonds has lost 2.5 percent this year, and was in the midst of a six-day losing streak during the period ended April 25.

The dollar has been surging as the Federal Reserve continues to lead other central banks in its move away from a decade of low rates and quantitative easing.

To contact the reporter on this story: Eric Lam in Hong Kong at elam87@bloomberg.net.

To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Andrew Monahan, Tomoko Yamazaki

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