Asian Fund Flow - Staying on the Sidelines
In the absence of significant policy announcements and any positive macro data surprises, investors stayed on the sidelines for the week ended 11 July; inflows into global equities were a low USD130m, down from USD8.8b a week earlier. US equities suffered a minor outflow of USD700m whilst Europe and Japan saw inflows of USD28m and USD106m respectively.
Despite the weaker global investment trends, sentiment on Asia ex-Japan continued to improve as the region recorded an inflow of USD174m in the latest week, the second week of net buying in the past 19 weeks. While funds flowed into all sectors, financials, IT, telecoms and utilities saw the biggest inflows. With better funds flow at both ends of the risk spectrum, we believe that, though improving, investors’ risk appetite remains relatively weak.
At the country level in Asia ex-Japan, only the developed markets of Hong Kong and Singapore saw inflows - and minor ones at that -while Thailand recorded the biggest outflow amongst the emerging markets. The data from the latest week is consistent with the pattern of funds flows over the past month, whereby investors are gradually switching from outperformers into laggards.
Malaysia Fund Flow by Sector (clcik to enlarge)
by Maybank IB