China Equities Continue See Inflows, Regional Markets Lose Momentum

• China equities were higher on Friday, outperforming HK equities. China’s market regulator vowed to tighten listing requirements onshore and beef up checks on publicly traded firms, in its latest effort to inject confidence. Based on equity flows, investors do seem to be growing more confident in the market with the past six days of net inflows, while short-term equity flow momentum continues to grow with the five-day average at 6.5 billion yuan, versus 20-day at 3.19 billion yuan, both well above the longer-term 100-day average of just 0.24 billion yuan.
• South Korean equities saw their largest outflow since March 2023 with a net outflow of $831 million while the Kospi was down almost 2%. Chances of an early Fed rate cut continue to weaken, which has been a major contributor to equity weakness especially in the tech space. Samsung C&T's shareholders rejected activist funds’ proposals on a dividend increase and share buyback at a closely watched annual general meeting. The five-day average is -$154.2 million, while the 20-day is $70.8 million. The longer-term trend is still a healthy $135 million.
• Taiwan equities saw their largest net outflow since January 17 with -$523 million in net outflows, higher US yields, and a weakened chance of an early Fed rate cut being the main drivers, while Taiwan expects higher inflation due to an increase in power prices. The five-day average is now -$99 million on the back of two days of outflows, while the 20-day average is $180 million, roughly in line with the 100-day average at $175 million.
• Thailand equities flows turned negative again on Friday with -$60 million in net outflows. There wasn't much in the way of market drivers other than higher yields, the SET was down 0.65% while the five-day average is now -$0.1 million, versus the 20-day at $0.5 million and the longer-term 100-day average at -$16 million.
• Indonesian equities were also negative on Friday with their largest outflow since October 18th, 2023, although this was on the back of the largest inflow since April 2022. Equities markets were down 1.42%. The five-day average is $117 million, the 20-day is $33 million, while the longer-term 100-day average is $16 million.
• Philippine equity markets saw their largest outflow since September 2023, the PSEi was down 2.09% with higher yields weighing on the market. Overseas cash remittances also missed estimates, coming in at 2.7% versus 2.8% expected. The PSEi briefly traded below 6800, a level it has been able to hold above since early Feb, a break and hold below could signal further weakness. The five-day average now sits at $1.39 million versus the 20-day at -$11 million.

Table 1: EM Asia Equity Flows