Westpac reports that the December quarter saw net inflows of:
- Debt $10.5bn, up from $7.1bn in Q3 (prev $7.6bn)
- Equity $5.1bn, more modest than Q3’s $9.7bn (prev $8.8bn), but still almost twice the average pace of the past three years
- Portfolio investment $4.7bn, significantly above Q3’s $0.8bn
- Direct investment accelerated to $13.2bn.
The global scramble for yield is driving up the ASX 50. We need to beware that capital inflows are fickle and may bolt at signs of a falling Aussie dollar.
Years ago foreign capital made up about 50% of the daily value of shares traded in Oz – does anyone know what is the percentage today?
The capital flows may bolt at the sign of a falling Aussie dollar, but I am thinking they might also be back while the dividends yields are where they are.
The Aussie dollar is only likely to fall when there is a capital outflow, so we are safe for the time being.