Ebbs & Flows Time for a Rethink?

- Investors sold a further USD865m of Asia ex-Japan equity for the week ending 6 June, bringingthe year-to-date outflows to USD1.7b. Market sentiment remained poor, with global equities suffering an outflow of USD8b, of which non-ETF investors accounted for USD3.6b.

- As in the past four weeks, we saw uniform outflows across the 10 sectors in Asia ex-Japan, possibly reflecting redemption pressures. As a result, there was little distinction in flows between defensive and high beta sectors.

- Despite the headlines looking like it is “more of the same”, some key macro indicators suggest that investors should have a rethink on their strategy. Global macro surprise indices have collapsed and US retail investor sentiment is approaching the bearish levels last seen in September 2011. Time for a rebound is approaching; we just need the Fed or the ECB to lend the bulls a hand.

below: Weekly Money Flow by Country (click to enlarge)

money flow

by Mayban IB