US investors big sellers of foreign stocks in Q3

Singapore

US investors were big sellers of most foreign stocks in the third quarter but cautiously continued to pick up Asian stocks, including those listed in Singapore. Meanwhile, Singapore investors, who had been clearing their holdings of US equities lately, cut back sharply on their selling just when global investors started to head for the exit on Wall Street. (see infographic)

The latest data released by the US Treasury show US investors sold a net US$38.92 billion of foreign stocks in July-September when global shares excluding the US tracked by the Morgan Stanley Capital International (MSCI) index slipped 5.19 per cent in US dollars, the first quarterly fall since 2012.

The sale of mostly European stocks, made in the midst of economic troubles in Europe and uncertainty in emerging markets, came after a quarter when US investors sold a net US$31.24 billion of foreign stocks.

US investors didn't flee the Asian stock markets though, but eased their purchases from a net US$15.11 billion in the second quarter to US$6.15 billion. They bought a net US$1.5 billion of shares in Singapore in the third quarter, when the market dipped 1.7 per cent. This was down from US$2.27 billion in the second quarter.

In Hong Kong, where pro-democracy protests knocked 2 per cent off the stock market's value, US investors slashed their investments in stocks from a net US$8.7 billion in the second quarter to US$3.9 billion in the third quarter.

US investors largely shunned Japanese equities, which put up the best showing in the developed world, with the MSCI Japan Index up 6 per cent. They dumped a net US$1.58 billion of Japanese stocks, after purchasing a net US$1.11 billion in the previous quarter.

If US investors were shifting from buying to selling global stocks, the world at the same time was also making the same shift on Wall Street - though less sharply. After touching a series of all-time peaks through mid-September, US equities retreated late in the third quarter in the face of geopolitical worries, a strong US dollar and softer economic data, the S&P 500 index only managing a modest 1.13 per cent gain in the three months.

US Treasury data shows that foreign investors disposed of a net US$0.86 billion of US stocks against net purchases of US$23.76 billion in the second quarter.

The Europeans and Canadians were among the biggest sellers, but not the Asians who, after selling a net US$6.93 billion of US equities in the second quarter, bought a net US$120 million of US stocks in the third quarter.

Singapore investors, the second biggest Asian investors on Wall Street, continued to shrink their US stock holdings, but in much smaller amounts. They followed up on the net US$3 billion sale in the second quarter with a net sale of just US$0.62 billion in the third.

On the other hand, the Japanese, the biggest Asian investors in US equities, upped their sales from a net US$2.79 billion to US$5.82 billion.

Hong Kong investors, who sold a net US$1.41 billion in US stocks in the second quarter, snapped up a net US$6.79 billion - the largest Asian purchase in the third quarter.