Morgan Stanley note "Indonesia & Malaysia......>

ASIA: Morgan Stanley note "Indonesia & Malaysia saw the biggest foreign outflows

from bonds on the global risk sell-off in Q1. However, Indonesia has seen

foreign net inflows since Apr. China & Korea have seen net foreign inflows YTD.

- Indonesia saw sig. reduction in foreign ownership between January and April

(US$11bn) but flows started to rebound in May with improving risk sentiment.

- In China, inflows have been very strong on the back of exp. that the PBOC

could ease more & the index (GBI-EM and Global Agg.) weight increase. We still

exp. inflows to be US$70bn in '20.

- Foreigners continue to sell Indian bonds due to the concerns about INR

depreciation & with COVID-19 not under control. As India strives to be included

in the global bond index, such outflows could reverse once sentiment improves.

- In Korea, foreigners continue to buy local FX bonds, especially KTB.

- Foreigners account for 16.5% of the local bond market in Thailand, stabilising

after foreigners sold THAIGBs to raise cash in early 2020.

- Foreigners have been reducing local bond holdings in Malaysia. Foreign asset

managers and central banks are the two biggest foreign holders in the market."