Indian bonds set for highest foreign inflows in 6 years
Foreign investments in Indian bonds are skyrocketing, with the highest levels seen since 2017 as investors buy local debt in anticipation of India's inclusion in global indexes. Data compiled by Bloomberg reveals that inflows to fixed income, including corporate debt, have reached nearly $6 billion in 2023, with this month alone accounting for about a quarter of the flows. This surge in investment comes as India prepares to join global indexes like JPMorgan's emerging market gauge.
Monthly inflows to government bonds at highest since April 2020
India's government bonds are experiencing their highest monthly inflows since April 2020, marking the longest streak since the introduction of the fully accessible route index-eligible category. JPMorgan's decision in September to add India to its widely tracked Government Bond Index-Emerging Markets (GBI-EM) index has encouraged investors to increase their holdings of local bonds. This investment growth is also fueled by strong company earnings and a thriving Indian economy.
Global funds invest over $12 billion in Indian equities
Not only are foreign investments pouring into Indian bonds, but also into India's stock market. Global funds have bought over $12 billion worth of shares in the country this year, making it the highest amount in emerging Asia. The impressive performance of company earnings and the overall economy has attracted foreign inflows into India's equities market.
