Foreign investors dumped $27B in EM Asia equities in last three months

Foreign investors dumped $27B in EM Asia equities in last three months
It's the longest run of selling since China's Covid lockdowns last year.
OCT 31, 2023
By  Bloomberg

Global funds are offloading emerging Asia equities outside of China in droves as broader risk appetite cools amid concerns over a stronger dollar, higher borrowing costs and geopolitical tensions.

Foreign investors have dumped nearly $11 billion of shares in October, taking the three-month sell-off to about $27 billion, according to latest data compiled by Bloomberg. That’s the longest bout of selling since last June when the Federal Reserve’s tightening cycle and lockdowns in major Chinese cities were spooking investors.

Continued uncertainty about the path of US interest rates and potential impact of the Israel-Hamas war on oil prices — which almost reached $100 a barrel last quarter — have weighed on a region where most countries are oil importers. A stronger dollar is also straining local currencies as Treasury yields flickered near 5%, making equities less attractive.

“We are still keeping a cautious view, because we think that earnings estimates for 2024 are too high” in Asia, said Luca Castoldi, a hedge fund manager at Reyl Group. US growth will not be strong in 2024 and the effect of higher rates is being felt across sectors, he added.

Foreigners have pulled more than $4 billion of shares from Taiwan this month, while redeeming more than $2 billion from Korean and Indian markets. Meanwhile, overseas investors are 58 billion yuan ($8 billion) away from making 2023 the first year they would be net sellers of Chinese shares since the second mainland-Hong Kong trading link opened in 2016, as economic growth concerns persist.

China’s factory activity fell back into contraction in October, data released Tuesday showed. Investors are also looking ahead to the Federal Reserve’s policy decision and the US Treasury Department’s new borrowing plan later this week.

Latest News

Advisor moves: RBC swipes $1.7B UBS team, Baird duo departs for LPL's Linsco channel
Advisor moves: RBC swipes $1.7B UBS team, Baird duo departs for LPL's Linsco channel

RBC Wealth Management's latest move in New York adds an elite eight-member team to its recently opened Westchester office.

Stifel star broker, Chuck Roberts, leaves firm under cloud of investor complaints
Stifel star broker, Chuck Roberts, leaves firm under cloud of investor complaints

Stifel – so far - is on the hook for more than $166 million in damages, legal fees and settlements in investor complaints involving Roberts, a 35-year industry veteran.

iCapital secures $820M in latest funding, hits $7.5B
iCapital secures $820M in latest funding, hits $7.5B

The giant alt investments platform's latest financing led by T. Rowe Price and SurgoCap Partners, along with State Street, UBS, and BNY, will fuel additional growth on multiple fronts.

Merrill Lynch on the hook for $3.7M after clients claimed sale of unsuitable private equity
Merrill Lynch on the hook for $3.7M after clients claimed sale of unsuitable private equity

Some investors recently have seen million dollar plus decisions by FINRA arbitration panels involving complex products decisions go their way.

What does it take to feel 'financially comfortable' or 'wealthy' in 2025?
What does it take to feel 'financially comfortable' or 'wealthy' in 2025?

New report shines a light on how Americans view wealth today.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.