Foreigners pour billions into Taiwan, South Korea stocks on AI, growth optimism
Foreign inflows into most Asian equity markets have stabilised over the past three months as countries clinched better trade arrangements with the United States, calming tariff-related volatility and uncertainty in financial markets.
Overseas investors showed strong interest in Taiwan and South Korea for the third straight month in July, pouring $7.78 billion in Taiwan, the highest since the 2008 global financial crisis, and $4.52 billion in South Korea, the most since February last year, LSEG data showed.
The MSCI gauge of equities in Asia excluding Japan rose 2 per cent last month, its fifth consecutive month in green, while benchmarks in Taipei and Seoul advanced roughly 6 per cent each.
Taiwan and South Korea were the top destinations in the region for foreign capital, securing a cumulative $25.7 billion over the past three months as the two dominant Asian tech exporters benefit from a global surge in AI-related investments.
South Korea's shareholder-friendly reforms, political stability, and robust corporate fundamentals lured investors in 2025 after a dreary performance last year, though recent concerns over reforms to tax policy are posing new challenges.
Foreign investors also net bought $499 million worth of Thai equities in July, the first month of inflows since September last year, as they scooped up stocks at relatively cheap valuations after a prolonged period of heavy selling.
Even so, Thailand's uncertain political climate, challenging macroeconomic conditions, and an unnecessarily strong currency that undermines export competitiveness continue to impede any buildup of positions on these equities.
Thailand's benchmark SET index surged 14 per cent in July — its best month since November 2020 — but still not enough to erase steep losses suffered earlier in the year. The index remains 10 per cent in the red, ranking among the region's worst performers.
"We are cautious and underweight on Thailand as it remains in a fairly precarious position: high household debt, limited government spending, an uncertain political environment, and external negative events such as the conflict with Cambodia," said Kenneth Tang, senior portfolio manager at Nikko Asset Management.
"If Thailand can settle these issues, it will clear up the path for its recovery."
Indian stocks experienced sharp outflows of over $2 billion in July, the highest since February this year and snapping a three-month streak of net purchases.
Indonesia and the Philippines also logged net outflows of $570 million and $29 million, respectively, last month, while Vietnam attracted $326 million as investors bet on the country's strong growth prospects after it secured a comfortable tariff rate with the United States.
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South Korea's military has shrunk by 20% in six years as male population drops
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2 days ago
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Commentary: Espionage and tariffs can't tarnish TSMC's crown
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Trump likely realized that new, sky-high tariffs on TSMC would be a blow to US tech ambitions. Domestic titans at the heart of maintaining America's lead over China, such as Nvidia and Apple, are TSMC's biggest customers. And fresh levies would be an own-goal for the Stargate artificial intelligence infrastructure plans Trump announced earlier this year, which rely on hundreds of thousands of advanced chips. The news of a tariff reprieve helped drive TSMC's shares to a record on Thursday. TSMC's multi-billion-dollar expansion efforts in the US haven't always gone over well at home. Some patriotic Taiwanese want the chipmaker to keep core technologies within the self-ruled island as a safeguard from potential Beijing aggression. But expanding manufacturing to the US will only strengthen Taiwan's alliance with Washington and give its footprint room to grow. It's also worth recognising that TSMC and Silicon Valley are on the same side when it comes to countering China. 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The potential leak gives new fuel to critics of President Lai Ching-te, who has had a rough few weeks. As the first chips-related case involving the National Security Act, it's imperative that authorities investigate and respond to the fullest extent of the law. Taipei must set a precedent with this case to deter any future attempts. As my colleague Howard Chua-Eoan has written, history shows us that technological secrets and monopolies have a hard time staying that way in the long run. For now, TSMC is selling the shovels during a global AI gold rush. Even tariff threats and espionage attempts can't tarnish its crown just yet.
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Global stock index sinks with dollar, bond yields after weak US jobs data
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On Wall Street, the Dow Jones Industrial Average fell 542.40 points, or 1.23 per cent, to 43,588.58, the S&P 500 fell 101.38 points, or 1.60 per cent, to 6,238.01, for its biggest one-day percentage drop since May 21 and the Nasdaq Composite fell 472.32 points, or 2.24 per cent, to 20,650.13, its steepest one-day drop since April 21. Earlier, the pan-European STOXX 600 index ended down 1.89 per cent, its biggest drop since April 9. In currencies, the greenback reversed course to fall sharply after the data due to increased expectations for rate cuts. Earlier it had found support in fading hopes for U.S. rate cuts. The dollar index, which measures the greenback against major currencies including the yen and the euro, fell 1.37 per cent to 98.66, the euro was up 1.52 per cent at $1.1589. Against the Japanese yen, the dollar weakened 2.26 per cent to 147.32. 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