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Weekly Fund Flow Tracker
GEM inflows defy risk-aversion
Local exchange data: Buys moderating but still strong
Foreign net buying moderated WoW but still strong. For the week ending
Wednesday, July 13, aggregate foreign net-purchase of equities for the six
Asia ex-Japan markets where data is available (ie, Korea, Taiwan, India,
Thailand, Indonesia and the Philippines) came in at US$1.3bn, a moderation
from last week’s post-April high but still well above the YTD average of
US$235m and 52-week average of US$1.1bn. Net-buying, however, generally
trended down towards the end of our Wednesday-Thursday “data week,” amid
concerns over European debt contagion and ugly US fiscal politics.
Net-buying in Korea sustains but Taiwan net-sold. Net-buying in Korea
increased to US$1.6bn vs. US$1.0bn the week before, bringing the YTD
cumulative net-buying back into the black. Taiwan, on the other hand,
recorded net-selling of -US$795m vs last week’s net-buying of US$160m.
Net-buying in India edged down to US$257m, following two consecutive
weeks of robust foreign net-buying above US$1.1bn.
Southeast Asia continues to hold up except Thailand. Both Indonesia and
the Philippines were net-bought by a larger amount WoW (US$282m vs
US$266m and US$81m vs US$71m, respectively). But in contrast, foreign
net-buying in Thailand dipped back into negative territory (-US$142m)
following a strong rebound in the week post the country’s July 3 election.
Japan’s continued strength in line with broad Asia trend last week. Netbuying
data in Japan comes with a one-week lag; but for the week ending
8 July, Japan recorded foreign net buys of US$3.6bn, strengthening from
US$3.1bn the week before.
Frontier markets hint at recovering risk appetite. Net-buying in all three
frontier markets where high-frequency data is available (Vietnam, Pakistan,
and Sri Lanka) increased WoW, bringing the combined net-buying to
US$2.1m from last week’s net-selling of -US$28m.
Fund subscriptions data: GEM inflows defy risk-aversion
Subscriptions to GEM funds gaining momentum. Broad Global Emerging
Market funds received weekly net-subscriptions of US$1.0bn, vs. US$745m
the week before. This marks the fourth consecutive week of net-positive
subscriptions, totalling US$3.7bn (vs negative US$616m over the previous
four weeks).
Emerging Asia: Subscriptions slow, China funds drag. Weekly netsubscriptions
hint at a rotation from China-, Hong Kong-, Korea-dedicated
funds and pan-regional Asia ex-Japan funds, in favour of Taiwan-, Malaysia-,
and Indonesia-dedicated funds.
Developed Asia: Japan subscriptions continue to strengthen. Japandedicated
funds received US$967m net-subscriptions, up from US$719m the
week before. On the other hand, subscriptions to Asia-Pacific funds (which
combine Australia, New Zealand and Japan with emerging Asia) dropped to
-US32m from US$26m
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