Do not go gentle into that good night, old age should burn and rave at close of day; Rage, rage against the dying of the light, though wise men at their end know dark is right, because their words had forked no lightning they, do not go gentle into that good night.
Domestic investors exit China to invest in Vietnam
By Jhoo Dong-chan
By Jhoo Dong-chan
Domestic funds are eyeing emerging economies in Southeast Asia as Korea has reached its growth peak due to low interest rates and a decline in investment returns.
The trend is in stark contrast to investors' recent rush to exit the Chinese market due to growing uncertainties about the country's future growth amid the ongoing U.S.-China trade dispute.
According to the Korea Financial Investment Association, Koreans invested 3.16 trillion won ($2.66 billion) in Vietnam via domestic funds as of the end of May 2019, more than tenfold compared to the end of 2015 figure of 310 billion won.
India also attracted 1.22 trillion won worth of domestic funds in the period, up 310 billion won, or 34 percent, from 920 billion won at the end of 2015
Other emerging economies such as Indonesia and Thailand attracted 310 billion won and 120 billion won last month. A total of 5.5 trillion won was invested in Southeast Asia via domestic funds in the period, up nearly 4 trillion won from its 2015's 1.58 trillion won.
In the meantime, domestic investors withdrew investments from the Chinese market.
The data suggested they invested 4.54 trillion won in China via domestic funds as of the end of May, down 1.43 trillion won from 5.91 trillion won in 2015.
“The Chinese government has provided liquidity for months, but demand has yet to recover there,” said Daishin Securities researcher Park Chun-young.
“Despite the government's vigorous liquidity supply in infrastructure and real estate, private investment in the country's manufacturing sector is continuing its downtrend. China's growth in the second quarter is likely to hover below its first quarter growth rate.”
Domestic funds investing in Vietnam posted an average 14.47 percent return over the past two years, followed by India with 8.29 percent and China with 7.9 percent.
Reflecting investors' rush to emerging economies in Asia, asset management companies are introducing a series of new funds investing in these countries.
Asset Plus Investment Management recently introduced the Super Asia Rich Together fund, a product investing in emerging economies in the ASEAN bloc as well as India and Taiwan.
Samsung Asset Management is also selling the Samsung India fund investing in Reliance Industries, one of the country's largest conglomerates in terms of capitalization.