Funds shifted away from Asian marts

Funds shifted away from Asian marts

TOKYO (AFP): Institutional investors from industrialized countries have begun shifting funds out of Asian stock markets to other regions as Asian economic growth slows, a report said over the weekend.

European and U.S. fund managers were shifting money to Latin America, East Europe and the Middle East with higher growth potentials, the Nihon Keizai Shimbun said.

Over the past six months, Asian stock markets slumped except for Hong Kong and Taiwan, which are upbeat on the British territory's return to China in July. Latin American and East European markets rose 20-to-100 percent during the same period, the daily said.

The foreign capital outflow is likely to darken the future of Asian economies, the major business daily said, adding the trend may be prolonged amid fears that economic woes in Thailand can spill over into neighboring nations.

British investment trusts, a major investor in Asian stocks, reduced their weightings on Asian equity to 6.8 percent of the total in the January-March period, down from 8.0 percent a year before, the paper said.

The outstanding balance of Asian stock investments by Japanese investment trusts came to 382.2 billion yen (US$3.4 billion) as of the end of April, down 35 percent from a year earlier, it said.

A major U.S. investment trust has also decided to cut weightings on Asian stocks since the Thai currency debacle last month, it said.