Weekly Fund Flow Tracker - Back to square one :: Macquarie Research

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Weekly Fund Flow Tracker
Back to square one
Local exchange data: YTD cumulative buying back to zero
 Foreign net-selling in Northeast Asia eased WoW. For the week ending
Wednesday, June 22, foreign net-selling eased to -US$1.4bn from last week’s
-US$2.2bn for the aggregate of the six Asia ex-Japan markets where data is
available (i.e. Korea, Taiwan, India, Thailand, Indonesia and the Philippines) -
- helped by less intense selling in Taiwan (-US$486m vs. -US$1.14bn) and
Korea (-US$473m vs. -US$883m). Still, the past week’s foreign selling brings
Asia ex-Japan’s YTD cumulative total back into negative territory, with the
cumulative inflows since late March now having been fully reversed.
 TIPs buying sustains while India outflows intensify. Net-buying in the
Philippines strengthened WoW to US$8m from US$1.5m. Indonesia recorded
net-buying of US$78m with momentum accelerating towards the end of the
week. Net-selling in Thailand continued to ease (-US$68m vs. -US$194m).
On the other hand, India recorded foreign net-selling every single day during
the week, totalling -US$453m, more than double last week’s -US$203m.
 Selling in Japan intensified. For the week ending June 17, Japan did not
escape the outflows recorded in the Asia ex-Japan markets last week: netselling increased to -US$1.8bn from -US$498m the week before.
 Frontier markets net-sold. All three frontier markets where high-frequency
foreign stock buying data is available (i.e. Vietnam, Pakistan and Sri-Lanka)
recorded decreased net-buying/increased net-selling, bringing the aggregate
down to -US$5.3m from positive US$0.5m the week before.
Fund Subscription data: GEMs rebound, Asia still sluggish
 GEM funds net-subscriptions a 7-week high. Despite managers’ selling of
individual Asian stocks, weekly net-subscriptions to Global Emerging Market
funds actually rebounded to US$902m, vs. YTD average net-redemptions of -
US$121m. The lack of a firm trend in weekly GEM subscriptions since May,
however, still seems to signal a lack of strong conviction among investors.
 Emerging Asia: Taiwan sidesteps pan-Asian fund redemptions.
Moreover, weekly net-redemptions at pan-regional Asia ex-Japan funds in
particular (at -US$412m) hit their highest level since late March. Of note,
though, Taiwan-, Indonesia-, and Philippine funds received positive net
subscriptions at the single-country-fund level.
 Developed Asia: weekly redemptions continue. Weekly net-redemptions at
Japan-focused funds of -US$250m marks the 7th week of consecutive
outflows, while redemptions eased WoW for Asia-Pacific Funds (which
combine Australia and New Zealand with Japan and emerging Asia).
 Monthly portfolio allocation data suggests continued rotation into China,
Discretionary. EPFR survey-based consensus portfolio positioning data for
end-May show increased weightings in China (by 0.4ppt to +1.9% vs. the
MSCI Asia ex-Japan benchmark) and Malaysia (by 0.6ppt to +0.4%), offset
mainly by decreased weighting in Hong Kong (-0.9ppt to -0.5%). Sector-wise,
increased Overweights in Consumer Discretionary (by 1.0ppt to +3.2% vs. the
benchmark), Industrials (by0.4ppt to +1.6%) and a decreased Underweight in
Tech (up by 0.4ppt to -0.3%) were balanced by decreased Overweights in
Financials (by 1.1ppt to +0.7%) and Materials (by 0.7 to -0.3%). [See Figure
10 for full data set.]