The Dutch pension asset manager's Asia Pacific head of real estate says his team has just had one of its busiest years ever and that 2021 is looking similarly promising.
Fitch attributes the slowdown to the heightened risk aversion of global investors and AsiaÆs deteriorating economic fundamentals.
Foreign direct inflows to Asia in the first quarter of 2008 were still strong, according to Fitch data. The problem lies with foreign participation in local equity markets (which has resulted in net outflows) and international issuance of debt securities (which has slowed). Fitch believes direct foreign investments (FDI) and loan flows could mirror capital market flows in the future.
Fitch tracks four types of capital inflows that have high data frequency: net FDI inflows, net foreign purchases into local equity markets, international banks' external positions in individual countries, and international issuances of debt securities. The agency believes the four data series should provide a general picture of net capital inflows into the region.
So far, there is no sign that net FDI inflows to Asia are weakening. Among capital importers in the region, the major support came from China, India and Singapore, while net FDI inflows have remained stable for Mongolia, Thailand, Indonesia and the Philippines. For capital exporters of Hong Kong, Korea, Malaysia and Taiwan, net FDI outflows have not shown any clear sign of deteriorating.
Foreign funds have reduced exposure to Asian equity markets in the first quarter, however.
For the first six months of the year, foreign net selling in Asian equity markets totalled $13.7 billion, the worst on record since Fitch started collecting this data in June 2001.
Outflows are larger now than they were in 2001 when the tech bubble burst and in 2003 when the Sars epidemic struck. The biggest withdrawal took place in Taiwan, due to its relatively big market capitalisation and its heavy bias towards to the electronics sector.
Net international issuance of debt securities dropped significantly in the first quarter of 2008. Total net issues declined by 47% to $5 billion. The most severe declines were recorded in Hong Kong and Singapore. They are the region's financial hubs and thus more sensitive to recent global capital market developments. Significant declines were also recorded in Malaysia, Thailand and India.
Sunsuper and QSuper appoints CIO for combined entity; State Street appoints heads of HK and Taiwan; Nothern Trust rebuilds Apac team; Manulife IM names emerging markets fixed income CIO; RBC Wealth Management hires four into HK; Lombard Odier hires two senior equity managers; Allianz Global Investors appoints Asia hand as equity CIO; and more.
Investors from China and the US are expected to continue buying assets in each other’s markets despite the blacklist of Chinese firms with military and surveillance ties.
Stronger government actions are needed to meet the Paris Agreement goal of limiting global temperature rise to 1.5 degrees, investors such as Hesta and CDPQ signed in a statement.
AsianInvestor explains why we chose the winners of the second half of our 2021 fund manager winners, by major local markets.