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J.P.Morgan: ASEAN Outflows Continue, Drivers For Reversal Remain Intact

ASIA

J.P.Morgan note that "foreign investors continued to withdraw from ASEAN equities in March and April. Year-to-date, only Indonesia (+$0.7bn) and Singapore (+$1.2bn) had net inflows, while the Philippines (-$1.1bn), Thailand (-$1bn), Vietnam (-$0.8bn), and Malaysia (-$0.5bn) had continual outflows. This contrasts with strong inflows to EM Equity funds as investors remain on the sidelines for ASEAN equities. Year-to-date, MSCI ASEAN (flat) has underperformed MSCI EM/AxJ (+5%), but there is strong dispersion within the region. Vietnam (+17%), Singapore (+11%), and Thailand (+3%) outperformed, while Malaysia (-2%), Indonesia (-6%), and the Philippines (-10%) lagged. We believe that there are key factors to drive flows back to ASEAN: (1) Tech companies listing and index inclusion, especially Indonesian unicorns, and Singapore's Sea Ltd; and (2) Earnings growth/recovery to drive market returns (Thailand, Vietnam, Indonesia). Our country preference in ASEAN is Singapore > Thailand > Indonesia > the Philippines > Malaysia."

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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