Over the past week (4 to 10 Aug), investors became more positive in equities and turned net buyers for the first time in four weeks, injecting a net US$6.3bn into global equity funds/ETFs. Notably US equities experienced a return of inflows while inflows into EMEA and Latin America remain intact. Both EMEA and Latin American equities have witnessed net inflows for six consecutive weeks. Asia Pacific ex Japan continues to attract solid interest from equity
investors (mutual fund/ETF injection: US$2.5bn; foreign injection: US$3.3bn). Foreign investors stay significant buyers in Taiwan, Korea and Thailand in particular. Although European equities recorded another week of withdrawal,
the most recent one (-US$2.2bn) has softened significantly
In the US, investors returned and pumped in a net US$5.1bn into the equity market following three weeks of outflow. The latest buying was largely focused on large and small caps, financials and energy. The better-than-expected July employment data last Friday lifted market sentiment with equities edging to new highs along with improvement in market breadth. Our global chief equity market strategist Sean Darby has recommended not to short the equity market for the time being and stressed the shape of the yield curve that will dictate equity market performance.
In Europe, equity outflows (-US$2.2bn) remain intact but the amount of withdrawal deteriorated quite significantly w-w. That said, Germany (-US$671mn), France (-US $443mn) and the UK (-US$291mn) remain the most significant casualties. In Asia, foreign investors remained solid buyers in Taiwan (US$1.0bn), Korea (US$796mn) and Thailand
(US$506mn). They have also been consistent buyers in majority of the markets