$49.77 Billion Exits Stocks in 7 Asian Markets in Biggest Outflow Since June
Key Facts
Foreign investors withdrew a net $49.77 billion from stocks in 7 Asian markets in October, marking the largest monthly net outflow since June, according to London Stock Exchange Group data cited by Reuters. The markets were South Korea, Taiwan, India, Indonesia, Thailand, Vietnam and the Philippines. Taiwan led with net sales of $30.68 billion, its largest monthly outflow since at least January 2008. South Korea recorded net foreign selling of $14.59 billion during the month. Most of the outflows were therefore concentrated in the two markets that are important hubs for Asia’s technology markets.
A comparison with previous months shows an acceleration in withdrawals from the seven markets. Foreign investors sold a net $23.49 billion in regional stocks in September, after buying a net $4.72 billion in August, according to London Stock Exchange Group data cited by Reuters. October’s $49.77 billion outflow was more than twice September’s level and the largest since June. The sequence puts flows on a volatile path during the period, from net buying in August to rising sales in the following two months. The regional figure is the net result of flows in the seven markets covered by the data, not a measure of flows across all Asian markets.
Reuters attributed the technology-related selling wave to concerns over heavy cash spending by cloud computing giants and the possibility of tighter AI regulation ahead of the US midterm elections. The report also cited concerns about environmental reviews and tighter regulations, which investors believe could hinder data-center construction and limit demand for chips. An Exness strategist expressed the profitability aspect of those concerns, saying the outflows reflected "doubts about AI infrastructure spending and its profitability." These factors link spending expectations for infrastructure and concerns about its returns with potential regulatory changes that could affect data-center construction and demand for semiconductors. The report did not say that a new US rule banning the construction of data centers had been issued.
The outflows coincided with a broader decline in Asian stocks during October. The MSCI Asia-Pacific ex-Japan index fell 6.91% for the month, compared with a 1.69% drop in the MSCI All Country World Index, according to Reuters. The gap shows that the Asian index underperformed the global index over the same period. The decline came in the month when the seven markets recorded their largest net outflow since June. Reuters linked pressure on technology-related stocks to investor concerns about cloud computing companies’ cash spending and the profitability of AI investments.
Flows did not move in one direction across the seven markets. India recorded a net outflow of $3.6 billion in October, its second consecutive month of outflows from stocks, according to Reuters. But foreign investors returned to Indian stocks in November, with net investment of $5.68 billion through November 11, the report said. In Indonesia and Thailand, October’s net outflows were $938 million and $199 million, respectively. By contrast, Vietnam and the Philippines recorded foreign inflows of $122 million and $109 million, respectively. This divergence shows that October’s regional total combined large outflows from some markets with inflows into others.
Selling pressure continued after the end of October, with foreign investors selling a net $22.6 billion in stocks across the seven markets in November through the date of Reuters’ report on November 11. This followed October’s net outflow of $49.77 billion, while India alone recorded inflows in November through the same date. November’s figures cover the period through November 11 and do not represent the full month. The data reflect continued divergence in flows across markets, while regional net selling remained large in the first days of the month. October, the latest completed month in the comparison, saw the largest monthly outflow since June.