Asian equities clock biggest foreign outflows since March 2020

Data from stock exchanges in South Korea, Taiwan, Philippines, Thailand, Vietnam, Indonesia and India showed foreigners net sold a combined total of $12.05 billion in regional equities, the highest since March 2020.

South Korea led outflows, seeing net sales of $7.97 billion last month on concerns over rising inflation, which has reinforced calls for gradual monetary tightening.

Taiwan faced outflows worth $2.1 billion, with the sub-tropical nation dealing with its worst drought in history after no typoons directly hit the island last year, meaning much less rain.

Thai and Indian equities saw net sales of $1.1 billion and $389 million, respectively.

India’s daily infection rates have been falling in recent weeks, offering hope that a devastating second week is ebbing.

BNP Paribas’ Raychaudhuri said he expects foreign flows to improve selectively in a few Asian markets in the second half of 2021, particularly in Taiwan and South Korea.

“Korea and Taiwan should benefit in the medium-term as corporate earnings in both markets are strongly driven by global consumption revival – particularly that in the developed economies – a trend that we believe is likely to last for a while,” he said.