Salient to Investors:

Ramin Toloui at Pimco says:

  • Brazil, South Africa and Mexico offer the best emerging market local-currency bonds because they offer higher yields than the debt of developed nations – very slow global growth and very low core industrialized yields are a strong force pulling rates down over time.
  • Flows into emerging-market debt will be sustained in 2013 because debt levels in emerging markets are much lower, yields are higher and the existing investor allocations are very lopsided for industrialized countries.
  • The Chinese yuan will keep rising.
  • South Korean bonds will benefit from possible interest-rate reduction and capital inflows from sovereign-wealth funds.

EPFR Global estimate emerging-market bond fund inflows totalled $25.3 billion for 2012 thru September versus $17.3 billion in 2011 and $53.6 billion in 2010.

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