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Investors pull out of India; China attracts funds

Source: PTI
December 08, 2008 19:29 IST
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Global investors withdrew about $14 million from India-focussed funds, while China continued to be the most preferred Asian destination attracting foreign inflows last week, according to a report.

Global research firm Citigroup, citing data compiled by emerging market fund flow tracker EPFR, said in a report that of the outflows registered by Asian funds, investors put in $209.9 million in China-dedicated funds.

Meanwhile, Asian equity funds inflow declined to $46 million in the first week of December, while it was at $350 million in the third week of November.

The report said China equity funds have absorbed $841 million new money in the past three weeks, representing 28 per cent of the entire cash flow so far this year.

"While the majority of Asian fund groups continued to face redemptions, inflows to China funds remained big," the Citigroup stated.

Further, the report added that despite a decline in foreign portfolio investment, local investors -- retail, mutual funds and others -- regained confidence in the Asian market.

"So much has been said about foreign investors redeeming from offshore Asian funds, the good news is that locals have returned as Asian markets stabilised," Citigroup said.

Korea pension funds and India domestic mutual funds have been net buyers too, purchasing $301 million in total during the period, it added.

Net purchases by local institutions and individuals in Thailand added up to $300 million in the past two weeks.

Among the other Asian economies which witnessed massive fund outflows in the past week are Hong Kong ($42.7 million), Singapore ($35.9 million) and South Korea ($17.6 million).

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