M&G Investments has increased holdings of Korean government bonds, saying
markets have priced in excessive Bank of Korea tightening. Low Guan Yi, head of
Asian fixed income at M&G, said easing inflation and a surge in AI-driven
revenue for Korean chipmakers and hardware suppliers should enable the
government to cut borrowing and reduce future bond supply. We believe the Korean
yield curve is pricing in too much tightening, she said, adding M&G has added
Korea bonds over the past two months. The view mirrors a growing cohort of Korea
observers who expect geopolitical factors and sustained AI momentum to help ease
near-term bond-market pressure, even as foreign investors net sold about $1.2bn
in July and the 10-year yield has risen roughly 22bp since end-June.
