Image: Reuters Berita 24 English - Emerging Asian equities outside China had significant outflows in June, as risk assets suffered from hei...
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| Image: Reuters |
Berita 24 English - Emerging Asian equities outside China had significant outflows in June, as risk assets suffered from heightened concerns over a potential recession and major central banks prepared to aggressively tighten monetary policy.
Data from Taiwan, India, South Korea, the Philippines, Vietnam, Indonesia, and Thailand's stock exchanges revealed that foreign investors sold equities worth a net $20.22 billion, marking their largest net sale since March 2020.
Monthly foreign investment flows in Asian equities
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20investment percent 20flows percent
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Jun Rong Yeap, a market strategist at IG, noted that recession fears dominated risk attitudes during the month of June, which led to a reduction in global equity positions, as evidenced by foreign outflows in Asia.
The Federal Reserve raised interest rates by 75 basis points last month, and a Reuters survey predicts that the U.S. central bank will raise rates by another 75 basis points in July and another half percentage point in September.
Taiwan and South Korea experienced outflows of $7.54 billion and $4.8 billion, respectively, as traders fretted over weak demand for electronic goods due to recession fears.
Meanwhile, Indian equities had outflows of $6.44 billion, bringing overall net sales for the second quarter to $13.85 billion, the highest since at least 2008.
Thailand, Indonesia, and the Philippines experienced respective outflows of $858 million, $502 million, and $207 million.
According to data from Refinitiv Eikon and the Hong Kong stock exchange, foreign investors purchased almost $11 billion worth of China-listed shares in June. This was the largest monthly inflow since December.
According to Zhikai Chen, head of Asian equities at BNP Paribas Asset Management, "we believe that some investors have moved assets from other EM countries back into China."
