FII inflows in Asian mart at $229 mn

Foreign funds have started buying Asian equities even as the Asian markets have staged a rebound from their lows of June 14.

During the week ended July 5, the foreign institutional investors' inflows in Asian markets topped at $229 million. Global markets follow a Thursday to Wednesday week while calculating fund inflows and outflows.

However, last week's inflows were 41 per cent below the 2006 weekly average. In fact, in percentage term, the inflows to Asia in 2006 have been almost 54 per cent lower than inflows during the same time last year.

The Citigroup reports on fund flows into Asian markets show that India, China, Hong Kong, Singapore and Thailand have received inflows while Korea, Malaysia, Taiwan, Indonesia and the Philippines witnessed outflows during the week ended July 5.

Asian markets have rebounded after June 14 with BSE Sensex appreciating by over 20 per cent to close at 10,930.09 on July 12 from low of 8929.44 on June 14.

The equity market in China recovered 14 per cent with the Shanghai Composite Index rising from 1531.33 on June 14 to 1745.81 on July 12. The markets in Hong Kong recovered 8.14 per cent with Hang Sang jumping from 15,247.92 on July 14 to 16,522.21 on July 14.

India country funds generated the most interest with three out of the 10 country-specific funds in Asia receiving new money for two consecutive weeks.

Top of the list is India country funds, taking in $200 million net cash compared with total redemptions of $1.5 billion in the preceding six weeks.

Hong Kong and Singapore country funds are the other two, which received higher inflows. China received inflows of $89.8 million while Hong Kong received $11.5 million.

On the other hand, Korea country funds saw $23 million outflows and Malaysia country funds saw $18 million outflows.

The resumption of inflows to Asia and emerging market equity funds offset the widening in global emerging markets fund redemptions.

Consequently, total outflows from all emerging market funds fell to $182 million versus an average of $2.6 billion between mid-May and June.

Inflows to international equity funds doubled week-on-week to $1 billion, the biggest in two months. On YTD (year till date) basis, net inflows totalled $17 billion compared with $10 billion a year ago.