We expect the domestic bond market to face continued volatility in the first quarter of 2023. While we hope for positive foreign capital inflows for FY2023, their flows are expected to remain volatile as central
banks in advanced economies still show a willingness to raise interest rates, although at a milder level, due to lingering inflationary pressures. Thus, the latest trend on the economic data released in 1Q2023 will significantly determine when they will raise
interest rates again and how long they will hold high-interest rates. Thus, market participants will be looking forward to it to formulate an investment strategy. As a result, we don't expect them to take long positions yet. And the latest capital inflows
at least illustrate where foreigners are hunting for short-term tenors and selling long-term tenors. Even though the market will still be volatile, we expect a subdued performance in the government bond market at the beginning of the year. Attractive pricing
and solid domestic demand will underpin performance. Unfortunately, we saw a risk to performance earlier this year. In addition to volatile foreign flows, the market will face supply risks due to the front-loading strategy and high supply.
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