Weekly Fund Flow Tracker -Follow the money… :Macquarie Research,

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Weekly Fund Flow Tracker
Follow the money…
Local exchange data: pendulum appears to be swinging to
the other side, the good side
 Significant foreign net-buying in Asia ex-Japan. The week ending
Wednesday, 12 October, recorded a significant US$2.1bn aggregate foreign
net-buying in the six Asia ex-Japan markets where data is available (i.e.
Korea, Taiwan, India, Thailand, Indonesia and the Philippines), vs last week’s
US$-923m net-selling. This was mainly driven by five out of the six markets
recording net-buying last week, especially by sharp turnaround in North Asia
(US$738m vs US$-628m the week before in Taiwan, and US$623m vs US$-
395m in Korea). The week was a bright start of 4Q after two consecutive
months of relentless selling (aggregate net-selling was US$-16.0bn in August
and US$-4.5bn in September) and the worse quarter since the GFC.
 TIP net-buying slowed down. The TIP markets (Thailand, Indonesia and
Philippines) combined recorded US$415m foreign net-buying, following
previous week’s US$714m when foreign capitals started to flow back. Pickup
in net-buying in Thailand (US$248m vs US$118m previously) was offset by
pullback in Indonesia (US$178m vs US$657m). Separately, India saw netbuying
of US$327m vs net-selling of US$-615m the week before.
 Japan lagged behind in the region. Data for Japan comes with a lag, but for
the week ending Friday, 7 October, Japan still recorded net-selling of US$-
98m, however substantially eased from US$-828m a week ago. Note that
cumulative foreign net-selling in August and September in Japan reached a
record US$-24.5bn, pulling down YTD net-buying to 1.3% of total market cap.
 Frontier markets were mixed. Both Vietnam and Sri-Lanka recorded netbuying
last week at US$1.5m and US$4.6m, respectively. This was offset by
increased selling in Pakistan of US$-6.6m from last week’s US$-4.7m.
Fund subscriptions data: HK/China back in vogue
 Emerging Asia: China/HK back in favour with highest net-subscriptions
since April. After four consecutive weeks of net redemptions, last week saw
US$292m aggregate net-subscriptions for HK China dedicated funds. We
highlight in August and September total net-redemptions of HK China funds
were US$-1.3bn. We note, however, previous spikes in net subscriptions over
the last 12 months faded quickly. Outside of HK China, except for the
Philippines, other single-country funds still received net-redemptions, but all
except Vietnam saw a slowdown in the rate of redemptions WoW. Weekly
net-redemptions of the pan-Asia ex-Japan regional funds also eased to US$-
277m from US$-524m in the previous week.
 GEM saw a turnaround after large net-redemptions in September. Weekly
net-subscriptions for Global Emerging Market funds were US$155m, following
the second-largest net-redemptions (US$-1.4bn) the week before over the
previous 32 weeks. Total net-redemptions in the previous four weeks were
US$-2.1bn.
 Developed Asia: turnaround in Japan. Last week, Japan-dedicated funds
received net-subscriptions, which was a turnaround from net-redemptions
each week in the pervious four weeks. However, broader Asia-Pacific funds
(which combine Australia, New Zealand and Japan with emerging Asia)
continued to be out of favour with intensified net-redemptions last week.