Latest news with #EastspringInvestments
Economic Times
02-06-2025
- Business
- Economic Times
India's index-linked bonds see record foreign selling in May on profit-booking, currency swings
Foreign investors sold Indian government bonds included in global indexes for a second straight month in May, driven by profit-taking and currency volatility rather than a change in sentiment towards the country, several investors said. ADVERTISEMENT Foreign investors offloaded 123.2 billion rupees ($1.44 billion) of Indian bonds under the Fully Accessible Route in May, the highest since its 2020 launch, after selling 111.4 billion rupees in April. They have invested 1.20 trillion rupees in Indian bonds till March since June 2024, when Indian bonds were included in the JPMorgan emerging debt market index. "The recent outflows are best viewed through the lens of profit-taking after a strong run, rather than a shift in fundamental conviction," said Rong Ren Goh, portfolio manager at Eastspring Investments, which manages $256 billion of assets. Some headwinds, including geopolitical tensions and uncertainty over the new RBI governor's stance on FX policy, may have also led investors to trim exposure and rebalance portfolios, he added. The Indian rupee has grown more volatile over the past six months since new RBI Governor Sanjay Malhotra took charge in December, with implied volatility averaging 4.26%, up from 2.24% during the final six months of former governor Shaktikanta Das's tenure. ADVERTISEMENT A rise in U.S. Treasury yields due to fear of a wide budget gap and inflationary impact of President Donald Trump's tariff policies and a drop in Indian rate due to declining inflation have also narrowed the yield differential between the two markets. The spread between Indian and U.S. bond yields have collapsed to 21-year low of around 170 bps now, from 250 bps early November. ADVERTISEMENT "This (selling in Indian bonds) was not driven by skepticism towards India, but rather by shifts in global macro sentiment," Jean-Charles Sambor, head of emerging markets debt at TT International Asset Management said, that manages $3.15 billion of assets across EM. "We do not see this (outflows) as a game changer. Sentiment towards Indian bonds is likely to improve as inflation continues to decline and there is more fiscal space," Sambor said, adding he remains constructive on rupee bonds and believes appetite for local currency bonds is returning. ($1 = 85.3790 Indian rupees) ADVERTISEMENT (You can now subscribe to our ETMarkets WhatsApp channel)
Time of India
02-06-2025
- Business
- Time of India
India's index-linked bonds see record foreign selling in May on profit-booking, currency swings
Foreign investors sold Indian government bonds included in global indexes for a second straight month in May, driven by profit-taking and currency volatility rather than a change in sentiment towards the country, several investors said. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Popular in Markets 1. India bond yields resume decline as all eyes on RBI decision this week Foreign investors sold Indian government bonds included in global indexes for a second straight month in May, driven by profit-taking and currency volatility rather than a change in sentiment towards the country, several investors investors offloaded 123.2 billion rupees ($1.44 billion) of Indian bonds under the Fully Accessible Route in May, the highest since its 2020 launch, after selling 111.4 billion rupees in have invested 1.20 trillion rupees in Indian bonds till March since June 2024, when Indian bonds were included in the JPMorgan emerging debt market index."The recent outflows are best viewed through the lens of profit-taking after a strong run, rather than a shift in fundamental conviction," said Rong Ren Goh, portfolio manager at Eastspring Investments, which manages $256 billion of headwinds, including geopolitical tensions and uncertainty over the new RBI governor's stance on FX policy, may have also led investors to trim exposure and rebalance portfolios, he Indian rupee has grown more volatile over the past six months since new RBI Governor Sanjay Malhotra took charge in December, with implied volatility averaging 4.26%, up from 2.24% during the final six months of former governor Shaktikanta Das's tenure.A rise in U.S. Treasury yields due to fear of a wide budget gap and inflationary impact of President Donald Trump 's tariff policies and a drop in Indian rate due to declining inflation have also narrowed the yield differential between the two markets The spread between Indian and U.S. bond yields have collapsed to 21-year low of around 170 bps now, from 250 bps early November."This (selling in Indian bonds) was not driven by skepticism towards India, but rather by shifts in global macro sentiment," Jean-Charles Sambor, head of emerging markets debt at TT International Asset Management said, that manages $3.15 billion of assets across EM."We do not see this (outflows) as a game changer. Sentiment towards Indian bonds is likely to improve as inflation continues to decline and there is more fiscal space," Sambor said, adding he remains constructive on rupee bonds and believes appetite for local currency bonds is returning. ($1 = 85.3790 Indian rupees)
Business Times
22-05-2025
- Business
- Business Times
Rajeev Mittal appointed CEO of Prudential's asset management arm
[SINGAPORE] Rajeev Mittal will lead Prudential's asset management business, Eastspring Investments, from Jul 1. He will replace Bill Maldonado, who will retire and return to the United Kingdom where his family has been living for the past four years, said Prudential in a press release on Thursday (May 22). Mittal will report to Prudential's CEO Anil Wadhwani. He will also be part of the Prudential group executive committee. Mittal was the managing director, Asia Pacific ex-Japan, of Fidelity International for six years before leaving the investment management services firm in October 2024. Prior to Fidelity, he spent 26 years at AIG and PineBridge Investments, where he served as CEO of both PineBridge Europe and PineBridge Asia Pacific. Wadhwani, Prudential's CEO, said that Mittal's 'deep expertise' in the Asian markets, as well as his track record in managing and scaling asset management businesses and client relationships, will contribute to the growth of Eastspring. Meanwhile, Maldonado will remain as an adviser to the business until the end of September 2025 to ensure a seamless leadership transition. He will also continue to serve as a board member of ICICI Prudential Asset Management Company.
CNBC
22-05-2025
- Business
- CNBC
Investors dump bonds globally as U.S. credit downgrade, Trump's tax bill ignite fiscal worries
A sell-off in global bonds is accelerating as Moody's downgrade of U.S. credit rating and President Donald Trump's tax bill has brought to fore investors' fiscal concerns globally. Events such as credit rating downgrades or budgets that risk expanding deficits tend to bring fiscal concerns front and center of investors' minds, forcing them to reprice long-end risk, said Rong Ren Goh, Portfolio Manager, Fixed Income, Eastspring Investments. While Trump was unable to sway GOP dissenters to support his broad tax bill that could drive U.S. debt higher by a projected $3 trillion to $5 trillion, it appears to have triggered a global bond rout. "Markets do not find Trump's "big, beautiful tax bill" beautiful at all," said Vishnu Varathan, a managing director at Mizuho Securities. "USTs were beaten up in an ugly sell-off." The U.S. 30-year Treasury yield broke above the key 5% mark for the second straight day, breaching the level last reached in November 2023. It is currently holding at 5.088%. The benchmark 10-year Treasury yield has climbed over 15 basis points since the start of the week. The sell-off in Treasurys comes on the back of the exodus in American assets in April, and is largely owed to investors' declining confidence in U.S. assets, said market watchers. When investors dumped U.S. Treasuries last month, they turned to bonds in Japan and Germany. This time, the Treasury sell-off is accompanied by investors exiting bonds across several major markets. The sell-off in long-duration bonds in each market has been driven by distinct factors, with the common thread being a growing unease with worsening fiscal trajectories. "These concerns are prompting a reassessment of the term premium required to hold longer-dated bonds," said Goh. Japan's 40-year government bond yield hit a record high of 3.689% Thursday. The country's 30-year government bond yield has also been hovering near all-time highs at 3.187%. The yield on Japan's benchmark 10-year government bond has climbed 9 basis points to 1.57% so far this week. The rapid steepening of Japan's government bond yield curve is owed to several reasons, but the key one is structural. Japanese life insurance companies, who used to buy long-term bonds in droves to comply with certain solvency regulations are no longer doing that, as they have largely met the regulatory criteria, according to Bank of America. Additionally, the Bank of Japan's inclination to tighten its monetary policy, which collides with the Asian nation's fiscal woes, also have a hand in fueling the bond sell-off, said Varathan. The sell-off in Japanese government bonds poses a bigger problem for U.S. sovereign debt. "By making Japanese assets an attractive alternative for local investors, it encourages further divestment from the U.S.," George Saravelos, Deutsche Bank's global head of FX strategy wrote in a note. German government bonds — known as bunds — are also being dumped. Yield on 30-year German debt are up over 12 basis points, while the 10-year yield is up over 6 basis points. "The removal of the German debt brake in tandem with continental re-armament, alluding to an end of Europe's pro-austerity bias and a revival of regional growth prospects were, arguably, the catalyst for the process [bond sell-off]," said Philip McNicholas, Asia strategist of the global macro fixed income team at Robeco. German bunds are also pressured by wider deficits, which are likely to be structural, Mizuho Securities' Varathan said. The 30-year Europe government bond yields have climbed over 12 basis points this week, and the 10-year yields are up about 7 basis points. "Investors don't really have much love for long duration bonds right now," Steve Sosnick, chief strategist at Interactive Brokers told CNBC. Concerns about global inflation are also a "killer" for longer bonds, said Sosnick, adding that shorter duration bonds are typically influenced by central bank policy, while longer duration debt is influenced more by investor expectations about the future of the economy. Bonds in some emerging market have bucked the wider trend though, with their yields dropping. India and China's 10-year bond yields have slipped, largely as they are more domestically-oriented markets, and in part because of their capital controls, said McNicholas. India's 10-year government bond yield inched lower by about 2 basis points since Monday, while China's 10-year yield also slipped marginally. "Foreign investors and global factors are far less relevant determinants for their respective yield curves," he said.
Zawya
22-05-2025
- Business
- Zawya
Elevated Treasury yields drag stocks on US fiscal outlook worries
SINGAPORE: Stocks and the U.S. dollar fell on Thursday, while longer-dated Treasury yields steadied near their highest in 18 months as worries of a worsening fiscal outlook in the world's biggest economy remained at the top of investors' minds. The spotlight is on U.S. President Donald Trump's tax bill that is expected to be voted on in the House of Representatives within hours and investors are worried it could add about $3.8 trillion to the $36 trillion U.S. debt pile. The sombre mood among investors after Moody's downgraded the U.S. credit rating last week has left markets slightly listless as a "Sell America" narrative gains traction, with the greenback hovering near its lowest in two weeks against other major currencies. European futures indicated a sharply lower open, tracking a dour Asian session, ahead of surveys on overall sector activity in Europe for May. The data could offer some insight into how businesses have been grappling with the challenges of a cloudy outlook for the trade-reliant economy. Investors have been looking for options outside the U.S. based on expectations it would not be immune in the event of a global recession spurred by Trump's erratic trade policy. "We continue to have uncertainty and worries about growth and worries about the ability of the U.S. government to raise more debt," said Vis Nayar, chief investment officer at Eastspring Investments in Singapore. "We're not expecting some sort of mean reversion back toward dollar strength, but longer-term that all leads to diversification into these emerging market countries." Investor reluctance about buying U.S. assets was evident on Wednesday after the U.S. Treasury Department saw tepid demand for the $16 billion sale of 20-year bonds that pushed bond yields higher. Yield on 30-year Treasury bonds steadied above 5% after hitting a 1-1/2 year high earlier in Asian hours. "Tariff concerns have firmly shifted to concerns about global bond supply and the reverberations are being felt across all asset classes globally," said Ben Wiltshire, global rates strategist at Citi. "Yields are not shifting higher due to economic optimism but rather a renewed focus on net bond supply. This is why we're seeing equities and long-end bonds both sell off." The bond market in Japan has also been in focus as a relentless selloff continued, with the 30-year JGB yield at 3.155%, not far from the record high of 3.185% hit in the previous session. Stocks in Asia fell, with MSCI's broadest index of Asia-Pacific shares outside Japan 0.6% lower, while Japan's Nikkei fell 0.8% on the stronger yen. TRADE DEAL PROGRESS The modest progress to date on trade deals has also kept investors jittery. Attention will also be on a Group of Seven meeting in Canada, where finance ministers put a positive spin on discussions to try to reach an agreement on a joint communique largely covering non-tariff issues. Investors have also been scouring for any hints that currency markets could be part of trade negotiations, but Thai and Japanese officials said currency markets were not part of their discussions. Meanwhile, bitcoin rose for the fifth-straight session and touched a record high of $111,862.98 as the world's most valuable cryptocurrency recovers from the tariff-induced selloff last month. It was last up 2.8%. Oil prices eased on Thursday, following a strong surge in the previous session, after unexpected builds in U.S. crude and fuel inventories raised demand concerns. Gold prices edged up for the fourth-straight session, helped by a softer dollar and safe-haven demand. (Reporting by Johann M Cherian; Editing by Jamie Freed and Saad Sayeed)
