Foreign Investor Equity Flow Turns Negative, SK The Exception

• China equities were lower on Wednesday led by decent sell-offs in small-cap and growth stocks. There was little in the way of economic data to drive the selling, although there was a raft of corporate earnings released with many companies missing estimates, recently the CSI300 failed to break important technical resistance, Morgan Stanley noted it also been noted that hedge funds have started to sell Chinese stocks and add short positions via Hong Kong markets and finally President Xi did meet with American Business leaders on Wednesday to try and convince them to invest into China. China equities saw an outflow via northbound connect of 7.2b yuan, the most since Jan 17th. The 5-day average is now -1.2b, the 20-day average is 1.81b while the longer term trend has fallen now at just 0.48b yuan.
• South Korean equities were a touch higher on Wednesday and the only market in the region to see inflow. This could be signs that investors have faith that the SK regulators and government can close the "Korea Discount". $257m entered the market, taking the 5-day average to $604m, the 20-day average to $191m while the longer term 100-day average is $185m
• Taiwan equities have now marked three days of net outflows, while also seeing outflows in 7 of the past 10 trading days. Government officials have been warning about equity market bubbles over the time, which may be causing foreign investors to start to trim their positions. Equity markets did however close higher. The 5-day average is now -$37m, 20-day average is $45m, both well below the longer term 100-day average of $184m
• Indonesia marked the third day of net selling, there has been questions from presidential candidates that the President elect had rigged the elections and that they want the results overturned which could be spooking some foreign investors while other have question the cost of the free meals election promise and it's impact on futures budgets. Equities were 0.75% lower on Wednesday, while the 5-day average is -8.21m, 20-day average is 20.8m inline with the 100-day average of 20.7m
• Indian equities have seen the largest outflow for the past 5 days of any other market in the region, there has been little in the way of market catalyst. The Nifity 50 bounce off the 20-day EMA. The 5-day average is now -$222m, the 20day average is $190m, well above the 100-day average of $90m

Table 1: EM Asia Equity Flows