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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
ASIA
(MNI Australia) Over the past trading month, northbound equity flows are now over 93bn yuan (including today's session), see the chart below. Over the past 3 years northbound flow momentum has not stretched much beyond this point in terms rolling monthly momentum. This might raise some caution about how long current strong momentum can be sustained for. However, as we highlighted earlier, the technical backdrop for China equities is on the improve with mainland indices, see this link for more details.
- Continued Northbound inflows should also benefit CNH all else equal. The correlation of rolling monthly changes in the currency and the monthly sum of flows is 73% at the moment.
Fig 1: China North Bound Flows & EM Asia Net Equity Flows
Source: MNI - Market News/Bloomberg
- The other line on the chart is the net flow picture for the rest of EM Asia - South Korea, Taiwan, India, Thailand, Indonesia, Philippines and Malaysia.
- The two series have been more in line with each other over recent months, which may reflect China's shift away from CZS. The rest of EM Asia line is also showing positive momentum, although is well below highs seen in recent years.
- Taiwan has seen +3443.8mn net inflows in 2023 so far, South Korea, +$2363.2mn, while Thailand is +$530.1mn. This won't just be a China story though, with signs of a reduced pace of Fed tightening clearly benefiting regional equity sentiment as well.
- India (-$1339.1mn and Indonesia (-$333.8mn) have seen outflows YTD. Such trends haven't stopped these respective currencies from rallying against the USD though. IDR strength in the last 3-4 sessions has been very prominent.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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