Portfolio outflows cloud SE Asia scene<\/p>\n
SINGAPORE (Reuters): Southeast Asian currencies, under the gun
\nbecause of political jitters, are also being pressured by
\nportfolio outflows, recent data shows.<\/p>\n
Foreign fund managers' withdrawals from regional stocks so far
\nthis year have risen sharply over the year ago period.<\/p>\n
Funds data from Nomura Asia showed Asia-dedicated U.S. mutual
\nfunds have sold a net $811 million of regional stocks between
\nJanuary and July 7 compared with net inflows of $293 million a
\nyear ago.<\/p>\n
The data were not country specific, but analysts said these
\nfunds were mostly being relocated to North Asian markets -- Hong
\nKong, South Korea and Taiwan.<\/p>\n
And in the near future, the outflows might not be limited to
\nSoutheast Asia; recent surveys indicate more fund managers are
\nincreasing their exposure in the U.S. and Europe while selling
\nAsia-Pacific stocks.<\/p>\n
The Nomura data were based on money being moved into or out of
\n164 open-ended retail mutual funds in the U.S.<\/p>\n
They represent a 99 percent chunk of Asia-dedicated retail
\nfund investment from the U.S. and are taken by the market as a
\nproxy for investor interest in the region.<\/p>\n
In increasingly divergent Asia, the figures are most likely to
\nrepresent foreign net selling positions in Southeast Asian
\nmarkets, according to fund managers in Singapore.<\/p>\n
"People are still concerned about political uncertainties and
\nthe slow pace of reform in this part of the world," said Robert
\nPenaloza, investment manager at Aberdeen Asset Management.<\/p>\n
"Most likely, these funds are being relocated to North Asia
\nwhere economic prospects are better," he said.<\/p>\n
Foreigners have net selling positions of 28.01 billion baht
\n($70 million) in Thai stocks year-to-date, compared with 3.13
\nbillion for all of 1999, Stock Exchange of Thailand data showed.
\nIn Indonesia, foreign investors had sold a net 400 billion rupiah
\n($42 million) of local stocks between January and April,
\naccording to official data.<\/p>\n
The Philippine stock market is also facing foreign net
\nselling, officials said, but no cumulative figures are available.
\nAlthough these sales have not always translated into actual
\noutflows immediately, they will over time, especially when
\nsentiment toward the region is bearish, analysts said.<\/p>\n
Going forward, this trend of outflows looks set to drag on,
\nalthough the jury is still out on its magnitude.<\/p>\n
A recent Merrill Lynch Gallup Survey for July showed fund
\nmanagers had increased their exposure to U.S. equities and sold
\nPacific and Japanese equities.<\/p>\n
The survey said emerging markets and the Pacific, where
\nmanagers had been following the global economic growth prospect,
\nwere losing out as these managers were more confident the U.S.,
\nEurope and Britain would achieve a soft landing.<\/p>",
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