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Data from stock exchanges in South Korea, Taiwan, India,
Indonesia, the Philippines, Thailand and Vietnam showed
foreigners purchased a net $11.74 billion worth of regional
equities in May - the biggest amount since November 2022.
Specifically, Taiwanese equities attracted a massive inflow of
$4.4 billion, followed by South Korean equities with $3.1
billion. The two markets accounted for about 64% of the region's
total inflows last month.
The rise of ChatGPT, launched last year, has propelled the AI
frenzy and sparked a global rally in chipmaker stocks.
"The chase for semiconductor stocks on optimism surrounding AI
demand has been a key theme for investors, and South Korea and
Taiwan’s significantly higher exposure to that industry may
account for the larger amount of net inflows as opposed to the
rest of the region," said Yeap Jung Rong, market strategist at
IG.
Meanwhile, foreigners secured a net $5.3 billion worth of Indian
stocks, their biggest monthly purchase since August 2022,
boosted by its strong economic growth in the March quarter.
"The GDP growth print was a significant positive surprise, and
strong bank credit growth and GST collections are underscoring
robust corporate growth outlook, we believe," said Manishi
Raychaudhuri, Asia-Pacific head of equity research at BNP
Paribas.
On the other hand, Thai, Vietnamese and Philippine equities
faced outflows of $995 million, $134 million and $81 million,
respectively, last month.
In contrast to the significant sell-off in 2022, foreign
investors have been net buyers of Asian equities this year,
buoyed by expectations that the Federal Reserve would adopt less
aggressive monetary tightening measures to combat inflationary
pressures.
A string of economic data, along with last week's dovish
rhetoric from Fed officials, has emboldened bets that the Fed
will likely refrain from lifting rates at its June 13-14
meeting.
(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in
Bengaluru; Editing by Simon Cameron-Moore)
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