Foreigners turn net buyers of Asian equities in June after four months

BENGALURU: Foreign investors turned net buyers of Asian shares in June for the first time in five months, as easing coronavirus restrictions and a surge in global liquidity helped by stimulus measures by major central banks bolstered risk appetite.

Overseas investors purchased Us$4.4bil worth of regional equities last month, data from stock exchanges in India, Indonesia, the Philippines, South Korea, Taiwan, Thailand and Vietnam showed.

They sold Us$52.84bil worth of money in those markets over the previous four months.

“The size of the outflows previously, which was the largest since the global financial crisis, likely means foreign investors are now underweight the region,” said Khoon Goh, head of Asia research at ANZ.

“A period of inflows is typically seen after such an event.”

Indian equities led the region with inflows of Us$2.89bil last month, its highest since November 2019, as the country emerged out of coronavirus-induced lockdowns last month.

However, the country has recorded Us$377mil in outflows so far this month due to a rapid increase in coronavirus infections in recent weeks.

With over 700,000 cases, India overtook Russia as the third most Covid-19 affected country globally and is just behind the United States and Brazil.

Semiconductors and tech exporter Taiwan received inflows worth Us$2.83bil last month on rising demand for telecommuting products as millions of people globally were forced to work at home.

“Taiwan is well-positioned to benefit from the post-pandemic tech opportunities, thanks to its leading role in global semiconductor fabrication, established semiconductor supply chain, and strong technology and investment capabilities,” DBS Bank said in a report.

Vietnamese equities also received Us$651mil in inflows last month.

On the other hand, South Korean equities witnessed an outflow of Us$705mil, much smaller than Us$3.3bil in May.