Foreigners were net purchasers of Asian equities in December but the inflows paled in comparison with the massive outflows faced throughout last year, as regional stocks were hit by a strong dollar and a dip in business activity due to COVID-19-led curbs.
"FIIs have largely shunned Asian markets for the last couple of months largely due to an appreciating U.S. dollar and well performing developed market equities, while Asian peers had been grappling COVID-19 waves and regulatory actions," said Suresh Tantia, senior investment strategist at Credit Suisse.
Graphic: Breakdown by country for Asian equities' foreign investment flows in 2021, https://fingfx.thomsonreuters.com/gfx/mkt/zdpxoqolgvx/Breakdownper cent20byper cent20countryper cent20forper cent20Asianper cent20equities'per cent20foreignper cent20investmentper cent20flowsper cent20inper cent202021.jpg Also, concerns in China's real estate sector, with its largest builder China Evergrande Group struggling to repay its debt, also hit sentiment.
Indonesia and Indian equities received net inflows last year, however, the latter witnessed outflows worth US$5.12 billion in the fourth quarter of 2021.