Six Asian markets of India,Korea,Taiwan,Thailand,Indonesia and the Philippines have witnessed an aggregate foreign fund outflows of USD 7.8 billion during the current month.
According to global research firm Macquarie,the six Asia ex-Japan markets,where data is available,recorded aggregate foreign net-selling of USD 514 million,but at a “moderate pace” during the week ended May 24.
For the month,there has been an aggregate net-selling of USD 7.8 billion from the said markets.
The month of May has proven to,yet again,follow the old adage of “sell in May and go away”,the report said. The sell in May and go away strategy says that an investor can earn better returns by investing in stocks during the ‘best six months’ of a year (from November to April) and then selling the stocks in May and switch to bonds for the worst six months (from May till October).
From India,overseas investors have withdrawn as much as Rs 435 crore in May so far largely owing to perceived policy paralysis,depreciating rupee,high fiscal and current account deficit.
Meanwhile,confidence level on the Japan economy is returning back as Japan funds witnessed net subscriptions for the sixth straight week amounting to USD 2.9 billion,Macquarie said.
For the week ended May 24,Japan funds witnessed net subscriptions worth USD 1,238 million,which also marks the highest weekly level of net subscriptions since January 2009.
“This trend may continue as valuations remain the cheapest in the region,” the report said. Meanwhile,Greater China witnessed a sharp increase in net redemptions to the tune of USD 343 million,the highest level over the past year,but not surprising given recent mounting evidence suggesting a marked slowdown in economic activity.
Going ahead some of the major trigger for global fund flows would be corporate earnings by key companies from the Asian region include Tingyi,Sime Darby,Oil & Natural Gas Corp,Tata Motors and Genting Malaysia. Besides,inflation data from Korea,Thailand,and Indonesia,and GDP figures from Philippines and India are also expected this week,the report said.