S'pore leads Asian investors in fleeing Wall Street in Q2

Singapore

GREECE scared the wits out of global investors on Wall Street in the second quarter of the year.

Led by Singapore-based investors, Asians dumped a net US$14.75 billion of US stocks - almost half of the net total which fled the US that quarter, as Greece stood on the verge of a default in payment to the International Monetary Fund.

Only the Europeans, with the British accounting for over half of the total, got rid of a bigger chunk of the US equities - a net US$17.69 billion worth of them

Overall, foreign investors took off with US$35.35 billion in net sales in the April-June quarter, up sharply from US$12.99 billion in the previous quarter.

US stocks suffered its biggest daily decline since last October on June 29, following news that Greece had shut down its stock market and the banks put in place capital controls to prepare for the non-payment.

For the whole of the second quarter, US stocks were flat with the Standard & Poor's 500 index up barely by 0.28 per cent in US dollar terms.

Singapore investors disposed of a net US$3.13 billion in US equities in the quarter, up from a net sale of US$180 million in the first, according to the latest figures released by the US Treasury.

Chinese investors sold a net US$2.77 billion, against a net sale of US$340 million in the quarter before.

There were Asian investors who were net buyers on Wall Street in the second quarter, but their purchases were small. Hong Kong investors picked up a net US$1.59 billion of shares, up from US$920 million previously.

The Japanese bought a net US$1.41 billion, down from US$1.86 billion. South Korean investors acquired a net US$90 million, while their Taiwanese counterparts picked up just around a net US$10 million in US stocks.

These purchases were dwarfed by the disposals made by Singapore and Chinese investors.

Seeking shelter from the threat of a Greek default - and with an increase in interest rates delayed - Asian investors shifted their attention to US Treasury bonds, snapping up a net total US$2.47 billion of the debt assets in the second quarter.

This was a reversal from the previous quarter's net sale of US$14.75 billion.

The Japanese were a notable exception, extending their net sales of treasury bonds from US$5.12 billion in the first quarter to a whopping US$19.43 billion in the second. The Chinese eased slightly on their purchases, but still have a heavy appetite. They invested a net US$17.26 billion after buying US$18.16 billion in the previous quarter.

South Koreans were also big investors in US T-bonds in the second quarter, buying a net US$7.13 billion. They sold a net US$4.83 billion previously.

Singapore investors sunk a net US$1.63 billion into the US government debt instruments in the second quarter, down from US$6.24 billion in the first quarter.

While global investors fretted about Greece not being able to pay its debts, American players appeared unconcerned as they increased their quarterly outlay on foreign stocks, from a net US$31.82 billion to US$45.65 billion, according to US Treasury figures.

In Asia, where stocks (excluding Japan) dipped 3.0 per cent in local currency, US investors poured a net US$27.49 billion into the region, up from US$11.11 billion in the previous quarter. This included US$4.36 billion in Japan, which was the best performer with its stock index up 5.2 per cent.

The single biggest US investment in Asia went to Hong Kong, where US investors plonked a whopping US$16.25 billion in shares in the second quarter, up from US$2.19 billion in the first quarter.

US investors raised their purchases to a net US$2.89 billion in Singapore, up from US$1.68 billion previously.