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Asia-6 inflow recorded USD1.5b, rebounding from a combined two week outflow of
USD1.1b. Last week, all countries recorded inflow with the exception of Thailand and
India. As we highlighted in an earlier note, the massive sell off in Indonesia appears
overdone and foreign flow to ASEAN turned positive by USD64m, capping off two
consecutive weeks of foreign selling of a combined USD1.5b. Taiwan recorded the
largest inflow within Asia-6 last week (USD1.3b), up from its preceding week’s inflow
of USD416m. Equity indices within Asia-6 moved to the tune of foreign flows with only
the Thai SET and the Indian BSE index losing ground in the past week, falling by
2.5% and 3.2% w-w.
January wrap up: Moderate but isolated inflow
Despite the seemingly weak performance of the indices in the first month of 2011, it is
worth pointing out that net inflow for the month remains positive at USD2.0b, up 517%
y-y from a year ago. Inflow this time however, is much more concentrated within North
Asia as only Taiwan and Korea recorded net inflow in January 2011. Taiwan is the
clear leader, coming in strong at USD3.4b with Korea at USD937m. Both indices are
up 1.9% and 2.8% respectively. India was the sole underperformer in North Asia,
recording USD1.1b in outflow compared to USD230.4m as concerns of inflation and
overheating fears continued to dampen foreign flow. The Indian BSE index is the
worse performer so far in 2011, falling 10.3%, followed by Indonesia’s JCI index
falling by 5.8%. ASEAN had a net outflow of USD1.2b compared to just USD135m the
previous year. Political developments weighed down on Thailand as it continued to
suffer from outflow last week of USD81m while inflow to the Indonesian JCI recovered
from its worst index fall in eight months of 5.3% w-w, by rebounding 3.2% w-w last
week on the back of reassurances that the central bank would only choose policy
tightening as a last resort for taming inflation. We expect the Indonesian JCI to remain
under downward pressure as all eyes will be on inflation (which is expected to remain
high) once again this coming week.
So far, our view of foreign investors casting their roving eyes on developed markets
appears to be playing out, with USD7.2b in foreign inflow entering Japan (Nikkei 225
up 1.3% YTD) in the first three weeks compared to just USD338m in January 2010.
With the US recovery looking more solid with the latest acceleration of 4Q10 GDP, the
theme looks set to stay for some time. We expect inflow to Asia to slow in 2011 from
2010, especially after two years of record foreign buying.
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
Asia-6 inflow recorded USD1.5b, rebounding from a combined two week outflow of
USD1.1b. Last week, all countries recorded inflow with the exception of Thailand and
India. As we highlighted in an earlier note, the massive sell off in Indonesia appears
overdone and foreign flow to ASEAN turned positive by USD64m, capping off two
consecutive weeks of foreign selling of a combined USD1.5b. Taiwan recorded the
largest inflow within Asia-6 last week (USD1.3b), up from its preceding week’s inflow
of USD416m. Equity indices within Asia-6 moved to the tune of foreign flows with only
the Thai SET and the Indian BSE index losing ground in the past week, falling by
2.5% and 3.2% w-w.
January wrap up: Moderate but isolated inflow
Despite the seemingly weak performance of the indices in the first month of 2011, it is
worth pointing out that net inflow for the month remains positive at USD2.0b, up 517%
y-y from a year ago. Inflow this time however, is much more concentrated within North
Asia as only Taiwan and Korea recorded net inflow in January 2011. Taiwan is the
clear leader, coming in strong at USD3.4b with Korea at USD937m. Both indices are
up 1.9% and 2.8% respectively. India was the sole underperformer in North Asia,
recording USD1.1b in outflow compared to USD230.4m as concerns of inflation and
overheating fears continued to dampen foreign flow. The Indian BSE index is the
worse performer so far in 2011, falling 10.3%, followed by Indonesia’s JCI index
falling by 5.8%. ASEAN had a net outflow of USD1.2b compared to just USD135m the
previous year. Political developments weighed down on Thailand as it continued to
suffer from outflow last week of USD81m while inflow to the Indonesian JCI recovered
from its worst index fall in eight months of 5.3% w-w, by rebounding 3.2% w-w last
week on the back of reassurances that the central bank would only choose policy
tightening as a last resort for taming inflation. We expect the Indonesian JCI to remain
under downward pressure as all eyes will be on inflation (which is expected to remain
high) once again this coming week.
So far, our view of foreign investors casting their roving eyes on developed markets
appears to be playing out, with USD7.2b in foreign inflow entering Japan (Nikkei 225
up 1.3% YTD) in the first three weeks compared to just USD338m in January 2010.
With the US recovery looking more solid with the latest acceleration of 4Q10 GDP, the
theme looks set to stay for some time. We expect inflow to Asia to slow in 2011 from
2010, especially after two years of record foreign buying.
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