ASIA STOCKS: SK Outflows Stabilize, Outflow Pressures Elsewhere

Offshore investors remain a focus point for South Korea. Yesterday actually saw a very modest inflow, see the table below. Whilst it only slightly positive it was the first positive inflow day since May 6 of this year. Yesterday's price action in the Kospi/Kosdaq was very poor (off 8%). As we have noted recently, very strongly selling pressures in recent months has been attributed to the outperformance of local tech bellwethers Samsung and SK Hynix, which has forced portfolio rebalancing flows. Is this a sign that such outflow pressures are starting to dissipate? Today's market is rebounding, the Kospi up +3.4%. BBG's NBUY function has foreign outflows so far today (around $350mn). The KRW continues to rally, with USD/KRW back to 1515/20, up a further 0.70% in won terms, as the authorities step up efforts against one-sided depreciation pressures, while National Pension Service (NPS) FX Hedging has also risen. 

• Elsewhere, we have seen Taiwan net outflows pick up in recent sessions. In the US the SOX index has pulled back sharply from the 14k level, although was stronger in Monday US trade. As we noted earlier, the AI trade has run into a market that is starting to take notice of inflation and the NFP print last week is now forcing it to consider a potential rate hike. The Taiex is up today, but will be a watch point for these themes.
• Elsewhere Indian equity outflow pressures remained fairly consistent to last Friday. The RBI has stepped up efforts to curb rupee weakness, but local markets remain under pressure. The Nifty isn't too away from a downside 23k test.
• In South East Asia, the outflow theme remains consistent, with only Thailand positive YTD from a net inflow standpoint. 

Table 1: Asian Markets Net Equity Flows 

Source: Bloomberg Finance L.P./MNI