HSBC: Local Bonds from India, South Africa, and Turkey Offer the Best Defense Against Selling Pressure

HSBC Global Research's interest rate strategists have stated that local bonds from India, South Africa, and Turkey provide the best protection against selling pressure in emerging market local bond markets. The strategists noted that "the reasons for this include positive momentum, flow dynamics, and relatively stronger macroeconomic fundamentals," while highlighting that Indian government bonds have attracted some of the largest foreign inflows among EM counterparts over the past 12 months. They further commented, "In South Africa, macroeconomic uncertainties have significantly decreased following the elections in May. Current trend signals indicate that buying momentum is dominant in Israel, India, Turkey, and South Africa." HSBC holds a more favorable view on local bonds from these countries: India, South Africa, and Turkey.