GRAPHIC-Asian equities face outflows in Feb due to rise in U.S. bond yields

By Patturaja Murugaboopathy and Gaurav Dogra
March 1 (Reuters) - Foreigners were net sellers of Asian
equities for a second consecutive month in February, hit by a
jump in U.S. Treasury yields, which prompted investors to book
profits in regional equities.
Overseas investors sold a net combined total of $3.5 billion
in South Korean, Taiwanese, Philippine, Thai, Vietnamese,
Indonesian, and Indian stocks last month, data from stock
exchanges showed.
U.S. Treasury yields jumped last month on expectations of
higher inflation due to a big stimulus package to revive the
economy. U.S Treasury bonds are considered safer and hence their
higher yields tend to dissuade global investors from putting
money in risk assets such as Asian equities.
The MSCI's broadest index of Asia-Pacific shares
.MIAP00000PUS gained about 1.4% in last month, its smallest
gain in four months. The index was trading at a forward 12-month
price-to-earnings ratio of 17.42 at the end of January, the
highest since September 2009.
Among the regional markets, Taiwan and South Korea witnessed
the biggest net sales, with outflows of $4.4 billion and $1.8
billion respectively.
Philippine, Vietnam and Thailand also faced some outflows
last month.
Renewed virus outbreaks also depressed manufacturing
activity in some parts of the region, which affected the
sentiment last month, analysts said.
Six out of the nine reporting economies in the region posted
a decline in manufacturing activity in February, said Oxford
Economics in a report.
"But we expect a broad-based pick-up in growth momentum over
the course of the year, supported by vaccine rollouts, staggered
policy normalisation and an improved global backdrop," it said.
However, Indian equities lured an inflow of $3.5 billion,
helped by a growth-focused and high-spending federal budget
unveiled at the start of February.
India's economy expanded by 0.4% year-on-year in the
October-December quarter, returning to growth after shrinking
for two straight quarters, government data showed last
month.

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