Foreigners trim Asian stock holdings in Feb, biggest outflow since 2015
(March 6): Foreigners turned net sellers of Asian equities in February, with outflows over the month hitting their highest in more than two years, amid an increase in market volatility as well as a rise in US Treasury yields.
February data from seven Asian exchanges showed foreign outflows totalled about US$9 billion, the most since August 2015. That also compares to an inflow of US$7 billion in January.
Some analysts say Asia is likely to see a further exodus of foreign funds given continued high valuations and worries over US President Donald Trump's tariff plans.
Taiwan stocks led the region with outflows of over US$3 billion in February, while South Korea and Thailand witnessed outflows of US$2.6 billion and US$1.3 billion, respectively.
"February saw the revival of volatility with increased concerns over higher borrowing costs pressuring global equity markets," said Jingyi Pan, a Singapore-based market strategist at trading and investments provider IG.
The CBOE Volatility index, the most widely followed barometer of expected near-term volatility of the S&P 500 index, jumped to a 2½-year high in early February.
"Asian markets had not been spared, with jitters cutting across to the region, inviting outflows from the considerably riskier Asian assets," Pan added.
MSCI's broadest index of Asia-Pacific shares outside Japan fell about 5% in February, its biggest decline in over two years.
The exit of foreign funds from Asia was partly driven by attractive US Treasury yields that touched a 4-year high of 2.941% in February amid concerns US inflation would pick up.
Despite the recent correction, equities in India, China, Indonesia, Philippines were trading above their 10-year average price-to-earnings ratios at the end of last month, indicating more foreign selling could be on the cards, analysts said.
Asian equities are also likely to come under further pressure from Trump's tariff plans for imported steel and aluminium. South Korea is the No.3 steel supplier to the United States after Canada and Brazil and would be the hardest hit by the tariffs. Other Asian suppliers are Japan, Taiwan and India.
"The US tariff plan certainly kicked up the risk-off sentiment by a notch and the seemingly unfavourable developments could keep markets wary in the months ahead, capping inflows," said IG's Pan.
KUALA LUMPUR (March 6): The FBM KLCI climbed 5.75 points or 0.3%, mirroring Asian share gains today after US equities rose overnight. World shares rose as fears over a potential global trade war eased after US President Donald Trump faced growing pressure from political allies to pull back from the US' planned steel and aluminium import tax.
At Bursa Malaysia today, the KLCI closed at 1,848.37 points. The KLCI rebounded today after falling 13.45 points yesterday. Across Asia today, Japan’s Nikkei 225 rose 1.79%, South Korea’s Kospi gained 1.53% while Hong Kong’s Hang Seng increased 2.09%.
Reuters reported that Asian shares regained ground on Tuesday after Trump faced growing pressure from political allies to pull back from proposed steel and aluminium tariffs, easing investor worries about an imminent trade war. Sentiment was also supported by receding risk aversion in Europe with the euro gaining support from the creation of a coalition government in Germany and the impact of Italy's inconclusive election results limited to a mild sell-off in domestic bonds and stocks.
In Malaysia, JF Apex Securities Bhd senior analyst Lee Cherng Wee said: “The KLCI rebounded today in line with US markets but we expect the KLCI to see sideways movement in the near-term as the rally in US markets seems to be taking a breather. Besides that, there is not much catalyst for the KLCI currently,” said Lee.
Across Bursa Malaysia, top gainers included KLCI-linked Nestle (M) Bhd, Press Metal Aluminium Holdings Bhd and Maxis Bhd. The most-active stock was HB Global Ltd with some 307 million shares traded. HB Global shares rose 2.5 sen to 27 sen. THEEDGE
I bought this counter, but was shot down by a forummer who perhaps thought that I was once of those living in a foreign country who would always criticize raya. Well, I'm not.
ada baca ada kata price pressed down, mana logik, semua shareholders nak buat duit, competitor mungkin la buat kacau
kalau call warrants mungkin, sebab aku pernah try call warrants anjoo, lain macam game MM, saolah olah price tu macam dah set, bukan ikut mother shares movement pun, dah tu market belum tutup, MM dah tutup berapa harga untuk hari tersebut, game plan memang tangan MM
shares takla, tu semua terpulang pada market, dalam market macam2 orang pun ada, positive news ramai beli, bad news ramai lari, buat news kasi orang celaru, orang lari juga
dulu kat forum tropicana pun sama, gaduh 24 jam, shares tak naik, aku yang nak beli pun X jadi, tu sebab aku X nak campur dah forum hibiscus, sini ramai orang lagak pandai, tapi niat hanya tuhan yang tau
several from music industry, all related to entertainment industry, i have a friend in air asia, former MAS, wow he told me tony so strict, buy new car, someone from the office comes knocking at his house, those were the days, now IDK much about air asia, but the appointment of the celebrities you can see the news in the papers
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Tessa Joseph
7,919 posts
Posted by Tessa Joseph > 2018-03-06 09:53 | Report Abuse
yup, busy, he have asked me to monitor his counters