Weekly Fund Flow Tracker Strong rebound in EM buying:: Macquarie Research,

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Weekly Fund Flow Tracker
Strong rebound in EM buying
Local exchange data: Net-buying rebounds to 20-week high
 Weekly foreign net-buying rebounded strongly across Asia ex-Japan. Five
out of the six Asia ex-Japan markets where high-frequency data is available (ie,
Korea, Taiwan, India, Thailand, Indonesia and the Philippines) recorded
significant improvement in foreign net-buying for the week ending Wednesday,
30 March. Despite continued post-quake Japan uncertainties, the region ex-
Japan saw US$3.7bn in weekly foreign net-buying – a sum not seen since last
October – compared to net-selling of -US$453m the week before.
 Korea and Thailand recorded stronger buying momentum WoW (US$1.3bn
and US$356m, respectively, vs last week’s US$590m and US$6m), marking
an 11-day streak of consecutive inflows for Korea and eight-day streak for
Thailand. India, Taiwan and Indonesia saw rebounds to net-buying (US$1.1bn,
US$799.8m and US$197m, respectively, from previous-week net-selling of
-US$48m, -US$944m and -US$46m). The Philippines, on the other hand,
recorded increased net-selling WoW of -US$24m vs last week’s -US$11m.
 Record Japan inflows in the week following Miyagi quake. For Japan, the
two weeks ending 25 March recorded a total net-buying of US$12.5bn, and
fully US$12.1bn during the single week immediately after the 11 March
earthquake – Japan’s highest weekly level ever.
 Easing net-selling in frontier markets suggests recovery of risk appetite.
Aggregate net-selling for Vietnam, Pakistan and Sri-Lanka eased WoW to
-US$-6.2m from -US$31.5m. Vietnam and Pakistan recorded net-buying of
US$5.7m and US$3.6m, respectively, compared to net-selling of -US$4.6m
and -US$10m the week before, while net-selling in Sri-Lanka eased to
-US$6.2m from -US$31.5m.
Fund subscription data: From Developed back to Emerging
 GEM funds net-subscribed for the first week since January. This week
offered evidence that, per our expectation, this year’s ‘Emerging to
Developed’ flows may have been merely a tactical trade: Weekly netsubscriptions
to GEM funds registered an 11-week high of positive US$1.5bn
– a level not seen since January – following nine consecutive weeks of netredemptions
averaging -US$1.8bn weekly.
 Emerging Asia: Regional funds reverse nine-week redemption streak.
Pan-Asia ex-Japan funds similarly received net-positive weekly subscriptions
(ie, of US$94m) for the first time since late-January – vs YTD average netredemptions
of -US$478m. Moreover, all Asian (ex-Japan) single-country
dedicated funds saw improvement in weekly net-subscriptions, with the
exception of Taiwan-focused funds, which fell to weekly redemption of
-US$76.4m from net subscription of positive US$12.4m the week before.
 Developed Asia: net-redemptions suggest rotation to EMs. Japandedicated
funds received weekly net-redemptions of -US$196.6m compared
to last week’s positive US$276m. And net-redemptions at Pacific Asia Funds
(which combine Australia and New Zealand with Japan and emerging Asia)
persisted at -US$33m after -US$440m the week before.