BENGALURU: Foreigners turned net sellers of Asian equities in November amid mixed signals on whether the United States and China were getting closer to reaching a preliminary trade agreement.
Overseas investors sold US$4.3 billion (RM18 billion) worth of regional equities in the last month, after two successive months of buying, data from stock exchanges in South Korea, Taiwan, Thailand, the Philippines, Indonesia and Vietnam showed.
“I see it as a mixture of profit booking and also cautiousness in November given the event risks into the end of the year,“ said Jingyi Pan, a Singapore-based market strategist with financial services firm IG.
Washington’s next round of tariffs against US$156 billion worth of Chinese goods are scheduled to take effect on Dec 15.
South Korea led the regional outflows with foreign sales of about US$3 billion in November, the biggest in 13 months, mostly driven by its weak exports. The fourth-largest Asian economy faced the 12th straight month of contraction in exports, preliminary export statistics for the month of November showed.
Indonesian equities saw about US$500 million worth of foreign outflows, while Taiwan witnessed overseas sales of US$318 million last month.
However, Indian equities received foreign money of US$3.54 billion in November, helped by the central bank’s monetary stimulus measures and the reduction in corporate tax announced in September.
Refinitiv data showed Indian firms are expected to lead Asia with earnings growth of 36% in 2020, followed by South Korea and Vietnam.
Going forward, market participants are wary that the China-US trade tension could escalate further, if Trump goes ahead with the planned tariffs this weekend.
“We have seen Asian equities picking up at the start of the month (December) on trade hopes, but a lot hinges on whether we will see an interim trade deal ahead of the Sunday deadline for this optimism to carry on,” IG’s Pan said. – Reuters
