Foreign Investors Sell Asia Equities As Momentum Slows

• China equities were higher on Wednesday, with foreign inflows totaling 5.5 billion yuan via northbound connect. Earlier, US House lawmakers introduced a bill aimed at China, proposing to eliminate the capital gains tax break for investments in Chinese companies, along with measures to keep Chinese stocks out of index mutual funds and require SEC-reporting companies to disclose their dependence on China. China is the only market in the region that is attracting foreign investors in the short term. The 5-day average now sits at 3.62 billion yuan, surpassing both the 20-day average at 2.91 billion yuan and the longer-term 100-day average at 0.36 billion yuan.
• South Korean equities surged higher on Wednesday, with flows largely dominated by tech stocks. The 5-day average still sits negative at -$24 million, while the longer-term 20-day average is $49 million and the 100-day average is $144 million, figures well below those of the prior months.
• Taiwan equities were lower on Wednesday after global semiconductor names declined, with net flows hitting the lowest since January 17. Late in trading, Taiwan's February export order plunged to -10.4%, compared to the expected 1.2%, from 1.9% the prior month. The 5-day average is now -$541 million, well below the 20-day at $88 million and the 100-day average at $163 million.
• Thailand equities again saw another huge foreign investor outflow of -$556 million, following the prior outflow of $521 million. These outflows mark the largest and second-largest days on record, respectively, suggesting an institutional account has left the market, with supply covered by domestic accounts.
• Indonesia equities were largely unchanged on Wednesday, as the Bank of Indonesia (BI) kept rates on hold at 6.0%, as widely expected. The 5-day average is now $20.74 million, compared to the 20-day average at $20.70 million, slightly above the longer-term average of $19.1 million.

Table 1: EM Asia Equity Flows