QOTW (Nov 14th 2016): What do net flows look like across Asia Pacific markets?

What do net flows look like across Asia Pacific markets?


Chart 1: Percent of Asia Pacific Flow by the Top Markets from ITG’s Peer Group Universe


Chart 2:  Percent Net Flow by Market from ITG’s Peer Group Universe

  • Monitoring volume patterns in APAC can tell us a lot about where institutional investors are focusing their investments. We use ITG’s Peer Group Database to examine peer flows across Asia Pacific markets.
  • The first chart above shows value traded as a percent of total peer volume in APAC for a group of clients with consistent trading in APAC quarter over quarter. The second chart shows net flows for the same subset of clients.
  • Hong Kong has had net outflows in Peer three of the last four quarters. We also see that trading in Hong Kong, as a percent of total value traded each quarter has decreased. On the other hand, allocation of trading in Japan, as a percent of total value traded each quarter, has been rising. Historically, we see net flows into Japan with the exception of trading in the first half of 2016.
  • Trading flows in China as a percentage of peer is relatively low because a large amount of daily turnover in China is driven by retail investors.
  • We also examined the difference in trading costs between Hong Kong and Japan. We don’t observe large differences in the cost to trade between the two markets; however, average order sizes in Hong Kong are more than two times the size of orders in Japan.

Transaction cost distributions are based on the ITG Peer Group Database. Data for this report was pulled for a select group of 120 clients. Implementation shortfall costs are measured relative to the release to the desk and are expressed in basis points. Q3 2016 ITG Peer Group Database statistics are based on data as of 11/14/2016.

Refer to ITG Peer Analytics for information available on ITG Peer Group Analytics.

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