Funds Pour Into Southeast Asia as Rate-Cut Cycle Gets Underway

Global funds are snapping up Southeast Asian assets as the prospect of interest-rate cuts and attractive valuations holds out the promise of supersized returns.

Money managers have boosted positions in sovereign bonds in Thailand, Indonesia and Malaysia for the past two months, and have been net buyers of Indonesia, Malaysia and Philippine equities for three months. Those inflows have helped make Southeast Asian currencies the best performers in emerging markets this quarter, while regional stocks have easily beaten their EM peers.