4 May 2015
EM bond flows increase, China drives equity flows in region - ANZ
FXStreet (Barcelona) - FX Strategists at ANZ, summarize the Asia pacific equity and bond fund flows for the week ending 29th April 2015.
Key Quotes
“Fund outflows moderated to register USD567m from last week’s USD3,413m. The moderation in outflows was driven primarily by a moderation in outflows in China equities.”
“China equities have been the predominant driver of the region’s fund flows for the past few weeks. For this week, although China equity outflows halved from the previous week, it remains substantial at USD1,895m.”
“While the Shanghai Composite Index continues to gain on the back of further speculated easing moves, it has not been enough to prevent fund outflows. Meanwhile, equity markets in Emerging Asia ex China reversed to register an inflow of USD790m from an outflow of USD69m.”
“In bonds, the Emerging Asia region saw a further increase in inflows to USD537m from USD471m, also driven by China which was responsible for USD205m of the inflow. Notably, Emerging Asia Bond flows have been registering its 7th consecutive week of inflows.”
“For this week, Emerging Asia ex China also saw an increase in inflows to USD332m from USD204m, led by Korea and Indonesia.”
“Similarly, EM bond flows also saw an increase in inflows to USD967m from USD596m, driven mostly by hard currency bonds which registered USD798m inflow even as local currency bonds registered an outflow. This suggests that investors might be starting to get wary of exposure to local currency.”
Key Quotes
“Fund outflows moderated to register USD567m from last week’s USD3,413m. The moderation in outflows was driven primarily by a moderation in outflows in China equities.”
“China equities have been the predominant driver of the region’s fund flows for the past few weeks. For this week, although China equity outflows halved from the previous week, it remains substantial at USD1,895m.”
“While the Shanghai Composite Index continues to gain on the back of further speculated easing moves, it has not been enough to prevent fund outflows. Meanwhile, equity markets in Emerging Asia ex China reversed to register an inflow of USD790m from an outflow of USD69m.”
“In bonds, the Emerging Asia region saw a further increase in inflows to USD537m from USD471m, also driven by China which was responsible for USD205m of the inflow. Notably, Emerging Asia Bond flows have been registering its 7th consecutive week of inflows.”
“For this week, Emerging Asia ex China also saw an increase in inflows to USD332m from USD204m, led by Korea and Indonesia.”
“Similarly, EM bond flows also saw an increase in inflows to USD967m from USD596m, driven mostly by hard currency bonds which registered USD798m inflow even as local currency bonds registered an outflow. This suggests that investors might be starting to get wary of exposure to local currency.”