US investors offload Asian stocks in Q3

IT MUST have been the sub-prime lending scare. American investors dumped Singapore stocks along with those in other Asian markets in the July-September quarter, according to the latest figures published by the United States Treasury.

US investors made a net sale of US$524 million in shares listed on the Singapore Exchange as the Straits Times Index sank 3.8 per cent in August on worries about the sub-prime woes, though prices for the full third quarter (Q3) stayed rather flat.

The net sale was a reversal of the trading pattern in the previous two quarters, when US investors loaded their portfolios with net purchases of US$1.81 billion in Q2 and US$1.71 billion in Q1.

US investors had been bullish about Asia, including Singapore, snapping up stocks in the region to the tune of US$10.71 billion in Q2 and US$6.06 billion in Q1. But in the wake of the US credit crunch in Q3, they let go of a net US$6.08 billion in Asian stocks.

The exceptions were India, Pakistan, the Philippines, Taiwan and Thailand, where US investors continued to make net purchases.

Among their biggest sell-offs in Asia in Q3 were South Korean (US$2.67 billion) and Hong Kong (US$2.53 billion) stocks.

US investors did likewise with European stocks, the biggest chunk in their stock portfolios. They unloaded a net US$7.36 billion, against net purchases of US$32.45 billion in Q2 and US$34.61 billion in Q1, US Treasury figures show.

But US investors continued to pick up stocks in Latin America and the Caribbean in Q3. In the case of the Caribbean, they mopped up a net US$32.52 billion worth of stocks, after a net sale of US$12.16 billion in Q2.

US investors seemed more jittery about holding Singapore government bonds in Q3, according to US Treasury figures. They posted a net sale of US$2.59 billion in Singapore bonds - the largest sale in the region in Q3 after Japanese bonds (US$3.19 billion).

US investors got rid of US$1.72 billion in Singapore bonds in Q2, and US$1.79 billion in Q1.
For Asia as a whole, US investors made a net sale of US$6.92 billion in bonds, against a net sale of US$9.9 billion in Q2 and US$6.4 billion in Q1.

The exceptions were Thailand, South Korea, Malaysia, Hong Kong and the Philippines, where they recorded net purchases of US$422 million, US$347 million, US$191 million, US$59 million and US$27 million respectively.

US investors continued to pile up their investment portfolios with European bonds, making a net purchase of US$55.74 billion in Q3, up from US$43.17 billion in Q2.