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Last Updated : Mar 17, 2016 09:02 AM IST | Source: CNBC-TV18

FII buying in Emerging Asia may jump to $12-13 bn in March: Siva

If this pace of net foreign buying is maintained for the rest of the month, Sakthi Siva of Credit Suisse is potentially looking at a USD 12-13 billion month. According to her, biggest recipients are Taiwan, Korea, India and Thailand.


Sakthi Siva of Credit Suisse says net foreign buying has surged to USD 6.3 billion in Emerging Asia ex-China ex-Malaysia as of mid-March.


If this pace of net foreign buying is maintained for the rest of the month, she is potentially looking at a USD 12-13 billion month. According to her, biggest recipients are Taiwan, Korea, India and Thailand.


Siva believes that foreign investor capitulation, trough valuations and Dollar Index peaking support call for a further 13 percent upside for the MSCI Asia ex-Japan by year-end.

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Post Federal Reserve meeting, Ronan Carr of Bank of America Merrill Lynch says the Fed was more dovish than expected which is a mild positive and FOMC statement was more dovish than expected, and the dot plot fell to a median expectation of two hikes in 2016 from four previously.


Along with a powerful European Central Bank easing, global policy is supportive for risk assets, he feels. According to Carr, a more dovish Fed limits the prospect for USD strength which is likely to provide further relief for emerging market proxies.


David Doyle of Macquarie says he keeps view of a succession of Fed rate hikes in 2016, but revises base case to two hikes against three previously.


He sees a far greater likelihood of three hikes than one and believes market expectations for rate hikes remain well below what is likely to occur through year-end and into 2017.


The shift in the committee's rate projections on Wednesday and the tone of FOMC communications suggest greater weight on financial conditions and international developments, he feels.

"As a result, the FOMC may be less reactive in the near term to strength in domestic employment and inflation than we had," Doyle says.

First Published on Mar 17, 2016 09:02 am
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