Pimco Says Growing Asian Debt Markets Could Offer Outflow Refuge

(Bloomberg) -- Investors bracing for further outflows from emerging markets could find refuge in Asia, according to Pacific Investment Management Co.

Debt in the region is higher-rated on average than emerging-market peers and benefits from strong local demand. Some 77 percent of new emerging Asia bonds have been bought by local investors, up from 54 percent in 2010, data compiled by JPMorgan Chase & Co. and Bond Radar Ltd. show.

The five-fold growth of the region’s bond market since the start of the decade adds strong technical support, and debut sellers offer a new-issue premium to investors, Abhijeet Neogy, a Singapore-based portfolio manager for Pimco, wrote in a blog post. Pimco oversaw $1.77 trillion as of March 31.

To contact the reporter on this story: Ben Bartenstein in Lima at bbartenstei3@bloomberg.net.

To contact the editors responsible for this story: Rita Nazareth at rnazareth@bloomberg.net, Alec D.B. McCabe

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