Emerging-market investors pull back from riskier bonds as US yields rise
In short
Investors in emerging markets are avoiding the riskiest bonds as US Treasury yields jump.
The report says credit markets are under pressure and some money managers are shifting toward higher-rated debt like Indonesia and the Philippines. It does not say how much money moved or which countries were cut back on.
What the reporting says
Emerging-market investors are pulling back from riskier bonds as US Treasury yields soar and global credit markets sell off, according to the market summary. The report says tight credit spreads, last seen at levels not seen since 2007, are adding to concern about further bond selloffs, and some analysts are reducing exposure to certain countries. Higher-rated credits such as Indonesia and the Philippines are being favored, but the source does not identify the size of the flows.
Why it matters
The summary says emerging-market investors are reducing exposure to riskier bonds because US Treasury yields have risen and global credit markets have sold off. It also notes that credit spreads are at tight levels not seen since 2007, which is making some money managers more cautious. Some analysts are favoring higher-rated credits like Indonesia and the Philippines, but the source does not quantify the shift.