Foreigners turn net buyers of Asian bonds in October on improved growth outlook

(Reuters) -Asian bonds witnessed renewed cross-border inflows in October following a month of sharp outflows, as an improved regional growth outlook and a series of U.S. trade agreements in Southeast Asia lifted investor sentiment.

Foreign investors bought $368 million of regional bonds in Indonesia, Malaysia, Thailand, India and South Korea, reversing $5.48 billion in net sales the previous month, data from local regulatory authorities and bond market associations showed.

Last month, U.S. President Donald Trump signed reciprocal trade deals with Malaysia and Cambodia, along with a framework pact with Thailand aimed at addressing tariff and non-tariff barriers, bolstering optimism around the region.

"Better-than-expected growth momentum in most economies, artificial intelligence-related optimism and easing trade tensions were key drivers for increased flows into the region," said Khoon Goh, the head of Asia research at ANZ.

Malaysian bonds received $1.05 billion, the biggest monthly foreign inflow since May.

Malaysia's GDP growth jumped to 5.2% during July-September period, bolstered by domestic demand and a sharp recovery in exports, despite trade disruptions arising from U.S. tariffs on Malaysian goods.

Thai and Indian bonds saw $1.04 billion and $397 million worth of foreign inflows, respectively, last month.

Foreigners, however, last month withdrew $2 billion and $125 million from Indonesian and South Korean bonds, respectively.

"Resilient growth momentum and better-than-expected export demand should support continued inflows in the region heading into the end of the year," ANZ's Goh said.

(Reporting by Gaurav Dogra; Editing by Sherry Jacob-Phillips)