Understanding Asian Equity Flows, Market Returns and Exchange Rates

Chai-anant, Chayawadee; Ho, Corrinne

doi:10.2139/ssrn.1120293

“…Chai-anant and Ho (2008) confirm findings of earlier studies that non-residents generally buy into rising regional markets and sell into falling ones. They also find that inflows push up currencies and outflows push down currencies.…”

Section: Chai-anant and Ho And The Exchange Rate Connectionsupporting

confidence: 85%

Managing Recent Hot Money Inflows in Asia

McCauley¹

2010

Managing Capital Flows

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. ADBI's discussion papers reflect initial ideas on a topic, and are posted online for discussion. ADBI encourages readers to post their comments on the main page for each discussion paper (given in the citation below). Some discussion papers may develop into research papers or other forms of publication. Terms of use: Documents inThis discussion paper is part of the "Managing Capital Flows: Search for a Model" project.

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“…1 The data for the Thai stock market have also been used by Chai-Anant and Ho (2008). For a recent study that examines the information content of ultra-high frequency SET data see Pavabutr and Sirodom (2007).…”

Section: Introductionmentioning

confidence: 99%

International Portfolio Rebalancing and Exchange Rate Fluctuations in Thailand

Gyntelberg

¹

,

Loretan

²

,

Subhanij³

et al. 2009

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“…19 rates, see Chai-Anant and Ho (2008). On Thailand's experience, see Sangsubhan (2010), Thaicharoen and Ananchotikul (2008), and Bank of Thailand (2011).…”

Section: The Case For Free Capital Flowsmentioning

confidence: 99%

Rethinking Capital Flows for Emerging East Asia

Grenville

¹

2012

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Asian Development Bank InstituteThe Working Paper series is a continuation of the formerly named Discussion Paper series; the numbering of the papers continued without interruption or change. ADBI's working papers reflect initial ideas on a topic and are posted online for discussion. ADBI encourages readers to post their comments on the main page for each working paper (given in the citation below). Some working papers may develop into other forms of publication. The views expressed in this paper are the views of the author and do not necessarily reflect the views or policies of ADBI, the ADB, its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.Asian Development Bank Institute Kasumigaseki Building 8F 3-2-5 Kasumigaseki, Chiyoda-ku Tokyo 100-6008, Japan AbstractSince the 1980s, emerging countries have been urged to welcome foreign capital inflows. The result has often been a pattern of surges, where excessive inflows were followed by damaging "sudden stops" and reversals. This was dramatically evident in the Asian crisis of 1997-1998. Since that crisis, the emerging countries of East Asia have typically run current account surpluses and have accumulated substantial foreign exchange reserves. This has kept them largely protected from the impact of volatile capital flows, but this strategy is neither sustainable nor optimal.What is needed is a strategy that makes use of the potential benefits of capital "flowing downhill" (that would require these countries to run current account deficits) while at the same time protecting them from both the excessive inflows and the reversals. This strategy needs to take account not only of the fickle nature of the capital flows, but the structurally-higher profitability which is characteristic of emerging countries, which motivates the excessive inflows. This strategy would require more active management of both exchange rates and capital flows than has been the accepted "best practice". This requires a substantial shift in the current policy mindset. The International Monetary Fund has shifted some distance on this issue, but has further to go.

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Understanding Asian Equity Flows, Market Returns and Exchange Rates

Cited by 21 publications

References 29 publications

Managing Recent Hot Money Inflows in Asia

Managing Recent Hot Money Inflows in Asia

International Portfolio Rebalancing and Exchange Rate Fluctuations in Thailand

Rethinking Capital Flows for Emerging East Asia

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