Citigroup: Second wave of hot money pouring into Asia-Pacific

Citigroup reported yesterday that the second wave of hot money is pouring into Asia. Last week, 1.5 billion dollars (about HK $11.7 billion) poured into Asian funds, more than 790 million dollars in the previous two weeks. The report also shows that billions of dollars have flowed into its Asian Money market Fund (Market Fund) in the past 6-9 months, with at least 20% to 30% capital flowing into Hong Kong.　　The recent market fears that hot money outflows seem to be justified. The Asian stock market fell most yesterday, with the exception of Hong Kong stocks falling more than 2% per cent and the return to 7.7521, Taiwan, Singapore, India and other stock markets were down nearly 3%, fearing a move in the capital, Wen Wei Hui reported. But Citigroup released a study yesterday that, after a lull, 1.5 billion of billions of dollars were poured back into Asian offshore funds last week to form a "second wave of flooding". Funds from China and India have also been watched by the market. A total of $1.5 billion trillion was flowing into Asian funds last week, up from an average of 790 million dollars in the previous two weeks, and only two per cent less than the first 12% weeks of May, according to EPFR Global, a 215 billion-dollar offshore Asia fund.　　Global emerging market funds, which hold up to 52% per cent of Asian equities, last week saw continued inflows of more than $1 billion trillion, but global fund inflows remain inferior. Citigroup reported that the current history of the last four long capital inflows, totalling 10.9 billion of dollars. The 29-week capital inflow from November 2005 to May 2006 was recorded at $18.2 billion. In contrast to the average weekly capital inflows, the strength is now as strong as it was during 2006. However, real economic growth in Asia was 8.7% in 2006, and Citi's GDP growth forecast for this year was 4.5%.　　The bank noted that investors are now preoccupied with relative growth in the region, forgetting that Asian companies are not really good at turning economic growth into earnings per share. The report also means that when funds were returned to Asia in April this year, about 60% per cent of the money flowed into ETFs, but the proportion of the past two weeks had fallen to 25%. In the country, investors have renewed interest in China and India's funds, which last week received a total of 487 million dollars in new cash, up from $45 million in the previous week.　　In addition, pay attention to South Korea fund, capital inflow rises 13 times times. In addition, Lin Zhonghan, managing director of Asia's asset management in Paris, said at a press conference yesterday that, in the past 6-9 months, billions of dollars had been recorded in its Asian Money market fund, with at least 20% to 30% of the money flowing into Hong Kong. He believes that the net inflow of funds into money market funds continues and that the bank's client base is expanding. Lin Zhonghan explained that since the outbreak of the credit crisis, the market's investment strategy to the conservative, the return of stable demand for products, coupled with the global government "printing money" bailout policy, global interest rates low, so many companies choose to park money in money market funds to wait for the next round of investmentInvestment opportunities. He added that while recent market risk appetite has increased, it is believed that money market funds in the future will not be the phenomenon of capital flow.