Home / Financial Services/ Asian equities receive biggest foreign inflows in a year in January

Asian equities receive biggest foreign inflows in a year in January


Comments / {{hitsCtrl.values.hits}} Views / Friday, 8 February 2019 00:00

Facebook

 


Reuters: Foreigners were net buyers of Asian shares in January, data from seven exchanges showed, on hopes the US Federal Reserve would go slow with its monetary tightening measures this year and the trade talks would unwind some tariffs, bolstering world trade.

Foreigners net bought stocks worth $5.9 billion last month, the highest since a $7.1 billion inflow in January 2018, data from South Korea, Taiwan, India, Thailand, the Philippines, Indonesia and Vietnam showed. Foreign outflows from Asian equities were the biggest in at least seven years in 2018 as the Sino-US trade war and slowing profits battered regional stocks last year.

“Clouds will clear” for Asia and EM in 2019 as multiple top-down drivers reverse vs. 2018, notably a switch in Fed and Chinese monetary policy bias, easing of China’s fiscal policy, a declining US dollar path and potential improvement in US-China trade relation, said Jonathan Garner, Chief Asian Equity Strategist at Morgan Stanley, in a note.

In January, MSCI’s broadest index of Asia-Pacific shares gained 6.7%, its biggest monthly advance since March 2016.

South Korea and Taiwan led the region with inflows of $3.7 billion and $1.2 billion, respectively.

Indonesia received $969 million worth of foreign money in January, while the Philippines witnessed inflows of about $350 million.

On the other hand, foreign investors net sold Indian equities on concerns over lacklustre third-quarter earnings and uncertainty ahead of the upcoming elections.

Some surveys showed that Indian Prime Minister Narendra Modi’s ruling coalition will emerge as the largest group in the parliamentary elections expected in the next few months but may fall short of a majority required to rule.

“We think investors shouldn’t focus on politics alone as India is on the cusp of a new earnings cycle. While election remains an event risk in the near term, the medium-term direction of the equity markets will be determined by the earnings trajectory,” said Rajat Agarwal, a strategist at Societe Generale.

“The slowdown in earnings growth has clearly bottomed out, however, the strength of the new cycle and the expansion of the earnings pool will depend on the pickup in the capex cycle, on which we are seeing early signs.”


Share This Article

Facebook Twitter


DISCLAIMER:

1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.

COMMENTS

Today's Columnists

Religion is a problem in Sri Lanka; can it be a solution?

Saturday, 17 August 2019

Generally, it is expected that religion should be a solution to a problem. Ironically in Sri Lanka religion is the problem. Therefore, what would be the solution? When religion becomes a problem of a country....


Orthodoxy and change: A perennial Muslim issue

Saturday, 17 August 2019

Whether Muslims live as minorities in non-Muslim countries or as majorities in a total of fifty seven countries, the clash of orthodoxy with modern challenges is a perennial issue that bedevils progress on several fronts in these communities.


Making the MCC Compact work for Sri Lanka

Friday, 16 August 2019

It is a sign of these political times that even an apolitical issue like a foreign aid program becomes a hot topic in Sri Lanka. In April 2019, the Board of Directors of the Millennium Challenge Corporation (MCC) approved a compact program for Sri La


Sri Lanka needs a president hungry for success, not power

Friday, 16 August 2019

The late John F. Kennedy described politics as a “noble adventure, an adventure in which one joins hands with the masses for the service of man”. Not that the Kennedys didn’t play “politricks” in their heyday. But playing “politricks” w


Columnists More

Special Report

SPECIAL REPORT MORE