Jan 17 Reuters Asia exChina bonds recorded net foreign outflows for the first time in six years in 2022 as major central banks hiked their interest rates aggressively to tame inflationary pressures.

Overseas investors sold a net 4.89 billion worth of bonds in India, Indonesia, Malaysia, South Korea and Thailand, marking their firstyear net outflow since 2016, data from regulatory and bond market associations showed.

Indonesian bonds witnessed outflows of 8.86 billion last year, the most since at least 2014, while Malaysian and Indian bonds had net sales worth 2.1 billion and 2.02 billion.

However, the December outflows of 856 million from the regional bonds were much lesser than prior months, as the U.S. bond yields dropped sharply.

Foreigners purchased Indonesian and Thai bonds worth about 1.7 billion and 1.04 billion last month, respectively.

Indonesian bonds would be expected to benefit most from the lower U.S. rateslower U.S. dollar environment, while foreign investors are likely piling into Thailand bonds to preposition for the full recovery in Chinese tourist arrivals, said Duncan Tan, a strategist at DBS Bank.

However, South Korea faced its biggest monthly foreign capital outflows in almost four years because of an increase in the amount of bonds that matured at the end of the year.

Analysts were more hopeful about inflows into the regional bonds in 2023, as concerns about inflation have fallen slightly.

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