EM WEEKLY FUND FLOWS MONITOR: Foreign selling in Korea continues this week; Hedge funds remain net sellers in EM Asia in September MTD, while China exposure sees a recovery

EM Asia ex-China markets saw FII outflows of US$7.4bn w/w, driven by Korea (-US$6.5bn). Non-Asia EMs saw selling of ~US$90mn w/w, led by UAE (-US$46mn). Southbound saw inflows of US$1.5bn w/w (Ytd US$53bn). Equity funds globally saw inflows of US$79.3bn w/w; in DM, US funds saw net buying of US$64bn; in EM, GEM funds saw US$0.9bn w/w outflows. On hedge fund positioning (September), DM Asia is the most net bought while EM Asia is the most net sold; hedge funds are now O/W Asia equities (DM + EM) by +13% vs. MSCI World ACWI (vs. high of +20% in June). Within Asia, Korea, Taiwan and Japan are the most notionally net sold markets in September, while China and Hong Kong are the most net bought, and Chinese equities saw a recovery in net exposure in September month-to-date. Based on preliminary August EPFR data, Asian funds are most OW China, HK and SG, and most UW Taiwan and India, raising exposure in China;