Sluggish demand at Southeast Asian government bond auctions is creating attractive entry points for institutional investors, according to fund managers. Western Asset Management and Aberdeen Investments are among firms maintaining a positive outlook on the region, citing resilient domestic demand and strong economic fundamentals.

Investors are looking past depressed bid-to-cover ratios at recent debt sales, which have fallen to multi-month or multi-year lows. The weakness is attributed to rising global yields, elevated oil prices, and heavy government issuance weighing on longer-dated bonds.

Despite the soft auction metrics, fund managers view the pullback as a tactical opportunity to add exposure to a region they believe offers relative value compared to developed markets. The optimism is underpinned by Southeast Asia's growth trajectory and improving credit profiles.