Diminishing fears of US-China trade war and a decline in US interest rates made Asian markets an investment hub for foreign investors in 2019. Collectively, overseas investors purchased a net $23.47 billion worth of Asian regional equities in 2019, the highest since 2016, based on data from stock exchanges in India, Indonesia, the Philippines, South Korea, Taiwan, Thailand, and Vietnam, a Reuters report said.
Among them, Indian equities led with the region seeing net foreign inflows of $14.7 billion in the last year, the highest since 2014.
Taiwan and Indonesia attracted foreign funds totalling about $6 billion and $3.5 billion, respectively. Meanwhile, Thailand and the Philippines registered small outflows in 2019.
DBS Bank said that the removal of tax surcharges on foreign portfolio investors (FPI) and the out-performance of Indian domestic equities helped fuel inflows in 2019.
Last year, concerns over a slowdown in global economic growth amid simmering US-China trade spat, Brexit uncertainty, Japan-South Korea sanction conflict and other geopolitical issues, caused volatility in the stock markets but risk-taking investors were hunting for returns.
Indian stock markets performed well as its benchmark indices Sensex and Nifty 50 registered new all-time highs in 2019.
In December, foreign buying of regional stocks totalled to $2.92 billion in December, as China and the US agreed on signing a preliminary trade deal. The "phase 1" of the deal is expected to be signed on 15 January in Washington.
Analysts expect that recovery in regional economies will help Asian markets continue to receive inflows from foreign investors.