South Korea, Taiwan stocks bag massive flood of foreign investment in May on chip demand

During May, South Korean and Taiwanese stocks saw a massive flood of foreign investment, driven by a boom in interest in artificial intelligence (AI) and the accompanying demand for shares of the region’s hardware exporters. Foreigners acquired a net $11.74 billion worth of regional shares in May, according to data from stock exchanges in South Korea, Taiwan, India, Indonesia, the Philippines, Thailand, and Vietnam, the highest amount since November 2022. Taiwanese shares, in particular, saw a significant influx of $4.4 billion, followed by South Korean equities with $3.1 billion. Last month, the two markets accounted for around 64 per cent of the region’s overall inflows. ChatGPT’s growth, which began last year, has fueled the AI fever and prompted a global boom in chipmaker stocks. “The chase for semiconductor stocks on optimism surrounding AI demand has been a key theme for investors, and South Korea and Taiwan’s significantly higher exposure to that industry may account for the larger amount of net inflows as opposed to the rest of the region,” said Yeap Jung Rong, market strategist at IG. Meanwhile, foreigners secured a net $5.3 billion worth of Indian stocks, their biggest monthly purchase since August 2022, boosted by its strong economic growth in the March quarter. “The GDP growth print was a significant positive surprise, and strong bank credit growth and GST collections are underscoring robust corporate growth outlook, we believe,” said Manishi Raychaudhuri, Asia-Pacific head of equity research at BNP Paribas. On the other hand, Thai, Vietnamese and Philippine equities faced outflows of $995 million, $134 million and $81 million, respectively, last month. In contrast to the significant sell-off in 2022, foreign investors have been net buyers of Asian equities this year, buoyed by expectations that the Federal Reserve would adopt less aggressive monetary tightening measures to combat inflationary pressures. A string of economic data, along with last week’s dovish rhetoric from Fed officials, has emboldened bets that the Fed will likely refrain from lifting rates at its meeting from 13 June to 14 June. Read all the  Latest News ,  Trending News ,  Cricket News ,  Bollywood News , India News  and  Entertainment News  here. Follow us on  Facebook,  Twitter and  Instagram.