Last week saw the largest pullout from global emerging-market equity funds in 14 months, with the total reaching US$1.8 billion, as sovereign debt problems in Europe rattled investor confidence, Citigroup said in a report on Friday.
Net outflows from Asia-Pacific equity funds have reached US$122 million so far this year, representing the largest outflow among all the emerging market equity funds, said the report, co-authored by Hong Kong-based analysts Elaine Chu and Markus Rosgen of Citi Investment Research.
“[The] Year of the Ox ended with increased outflows from Asian funds,” Chu and Rosgen said in the weekly report, based on data compiled by EPFR Global, a Cambridge, Massachusetts-based research company.
The Citigroup analysts said all equity funds investing in the Asia-Pacific region suffered from redemptions, except Taiwan funds.
So far this month, net outflows from Asian equity funds have reached US$1.2 billion, following two consecutive weeks of redemptions, with combined outflows from China and India funds averaging about US$300 million per week in the last two weeks, they said.
Fears about a eurozone debt default, coupled with concerns over China’s earlier-than-expected credit tightening, have caused stock markets across the Asia-Pacific region to drop more than 8 percent since last month’s peak.
The benchmark MSCI Asia Pacific Index, which tracks regional equity markets through a weighted compilation of various indexes, had fallen by 8.19 percent to 116.39 on Friday from 126.77 on Jan. 15, Morgan Stanley Capital International Barra data showed.
China’s Shanghai Composite index, which closed below 3,000 on Jan. 27 for the first time in three months, has dropped 7.9 percent since the beginning of the year. Hong Kong’s Hang Seng index has fallen by 11 percent since its November high, and Taiwan’s TAIEX has retreated by 10.95 percent to 7,441.84 on Feb. 10 — the last trading day before the Lunar New Year holiday — from last month’s peak of 8,356.89 on Jan. 15.
In Japan, the benchmark Nikkei 225 Stock Average index has lost more than 9 percent since its peak in the middle of last month and South Korea’s Kospi index has shed more than 6.5 percent over the same period. Bourses in both Australia and New Zealand have lost around 7.5 percent since their peaks in the meantime.
While fears of a debt default in some parts of Europe seemed to have unsettled investor confidence, Moody’s said the outlook for the Asia-Pacific region was still broadly positive, albeit with downside risks.
“Economic fundamentals across the region are strong, with data showing regional economies are expanding, which should support demand for regional assets,” Matthew Circosta, a Sydney-based economist of Moody’s Economy.com, wrote in a report on Friday.
But it would not be all smooth sailing for Asia-Pacific markets this year.
“The outlook for the region is broadly positive, but depends heavily on recovering consumer demand from the US and Europe and a strengthening Chinese economy — ingredients which are vital for the region to enjoy sustainable expansion,” Circosta wrote.
STILL HOPEFUL: Delayed payment of NT$5.35 billion from an Indian server client sent its earnings plunging last year, but the firm expects a gradual pickup ahead Asustek Computer Inc (華碩), the world’s No. 5 PC vendor, yesterday reported an 87 percent slump in net profit for last year, dragged by a massive overdue payment from an Indian cloud service provider. The Indian customer has delayed payment totaling NT$5.35 billion (US$162.7 million), Asustek chief financial officer Nick Wu (吳長榮) told an online earnings conference. Asustek shipped servers to India between April and June last year. The customer told Asustek that it is launching multiple fundraising projects and expected to repay the debt in the short term, Wu said. The Indian customer accounted for less than 10 percent to Asustek’s
‘DECENT RESULTS’: The company said it is confident thanks to an improving world economy and uptakes in new wireless and AI technologies, despite US uncertainty Pegatron Corp (和碩) yesterday said it plans to build a new server manufacturing factory in the US this year to address US President Donald Trump’s new tariff policy. That would be the second server production base for Pegatron in addition to the existing facilities in Taoyuan, the iPhone assembler said. Servers are one of the new businesses Pegatron has explored in recent years to develop a more balanced product lineup. “We aim to provide our services from a location in the vicinity of our customers,” Pegatron president and chief executive officer Gary Cheng (鄭光治) told an online earnings conference yesterday. “We
LEAK SOURCE? There would be concern over the possibility of tech leaks if TSMC were to form a joint venture to operate Intel’s factories, an analyst said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday stayed mum after a report said that the chipmaker has pitched chip designers Nvidia Corp, Advanced Micro Devices Inc and Broadcom Inc about taking a stake in a joint venture to operate Intel Corp’s factories. Industry sources told the Central News Agency (CNA) that the possibility of TSMC proposing to operate Intel’s wafer fabs is low, as the Taiwanese chipmaker has always focused on its core business. There is also concern over possible technology leaks if TSMC were to form a joint venture to operate Intel’s factories, Concord Securities Co (康和證券) analyst Kerry Huang (黃志祺)
It was late morning and steam was rising from water tanks atop the colorful, but opaque-windowed, “soapland” sex parlors in a historic Tokyo red-light district. Walking through the narrow streets, camera in hand, was Beniko — a former sex worker who is trying to capture the spirit of the area once known as Yoshiwara through photography. “People often talk about this neighborhood having a ‘bad history,’” said Beniko, who goes by her nickname. “But the truth is that through the years people have lived here, made a life here, sometimes struggled to survive. I want to share that reality.” In its mid-17th to
RSS