Foreigners turn net sellers over the past three days. While it is only the past three days, Figure 1 highlights that foreigners have turned net sellers to the tune of US$624 mn. This recent net foreign selling is concentrated in Taiwan (US$368 mn) followed by Korea (US$217 mn) and Indonesia (US$106 mn). We do note that this small net foreign selling recently is coming after three consecutive months of net foreign buying. Figure 3 highlights net foreign buying of US$962 mn in February, US$12.5 bn in March (the sixth biggest month for net foreign buying in US$ since our data started in 1997) and US$3.6 bn in April.

　　On a rolling 12-month basis, foreigners are still net sellers. On a rolling 12-month basis, foreigners continue to be net sellers to the tune of 0.4% of market cap for Emerging Asia ex. China ex. Malaysia (see Figure 2). On this basis, the greatest foreign investor capitulation is in Thailand (-1%), Japan (- 1%, but we do not yet have April data), Korea (-0.7%), Philippines (-0.7%), Malaysia (-0.6%) and Indonesia (-0.5%). There is minimal capitulation in India (-0.1%) and Taiwan (0%) remains the only market where foreigners are still not yet net sellers on a rolling 12-month basis.

　　Buy the dips rather than chase the rallies. With MSCI Asia ex. Japan (MXASJ) falling in May in five of the past six years, as discussed in our 25 April report Sell in May?, we suggest investors buy the dips rather than chase the rallies.