Asian Currencies at Risk of Slowing Inflows in 2H, UBS Says
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Source: BFW (Bloomberg First Word)
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Rohit Arora (UBS Asset Management Japan Ltd)
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(Bloomberg) -- Most Asian currencies are vulnerable to a slowdown or reversal of inflows as equity flows remain weak in the second half on softer exports and subdued growth outlook, UBS strategist Rohit Arora writes in note.
- EM Asia recorded $64b of portfolio inflows in 1H, a record for the period, driven by strong growth momentum and easing of U.S. trade protectionism concerns
- Of this, $33b consisted of debt flows while the rest were equity funds
- India and South Korea accounted for about 70% of inflows
- Malaysia was an exception in recording outflows due to NDF market regulations; bulk of outflows occurred in 1Q
- Remains optimistic on India, Indonesia and Thailand debt where real yields are attractive from a global EM perspective
- PHP, IDR and INR more likely to face most fundamental pressure if flows swing into a negative territory as the three countries’ basic balances are close to zero
- KRW likely to benefit most from sustained flows amidst stable global financial conditions as South Korean stocks are at cheaper end of valuations spectrum
Alert: HALISTER1
Source: BFW (Bloomberg First Word)
People
Rohit Arora (UBS Asset Management Japan Ltd)
To de-activate this alert, click here
To modify this alert, click here
UUID: 7947283