HSBC Bullish On China And Korean Debt

"Capital flows into EM are rarely uniform in nature. Similar to tidal forces, a gravitational pull has seen foreign investors flock into a few low-yielding EM government bond markets such as China and Korea that offer superior diversification benefits and/or exhibit "safe-haven" characteristics within EM. This inflow, though, has been met elsewhere by tidal outflows of EM high yielders, in particular last year, and the external environment (EM taper tipping point: Four in focus, 2 March 2021) is likely see this bond flow patterns persist. We continue to a have strong preference for both China and Korea rates markets with distinct absence of recommended exposure at the long end of EM high yielders."