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

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