Foreign investors were net sellers of most Asian equities in 2020, deterred by the economic slowdown due to the COVID-19 pandemic, although the flows turned positive in the fourth quarter on hopes of a recovery and vaccine optimism. Cross-border investors sold a combined total of $49 billion in Indonesian, Philippine, South Korean, Taiwanese, Thai and Vietnamese stocks last year, stock exchange data showed. “The COVID-induced outflows have been significantly more brutal to what we had in previous shocks (2013 Fed tapering, 2008 crisis or China 2015 currency volatility),” said Frank Benzimra, head of Asia equity strategy at Societe Generale. Graphic - Foreign investments in Asian equities: Graphic - Foreign investments in Asian equities - annual: However, the trend has changed since the fourth quarter of last year, due to a weakening dollar and a recovery in EM earnings, he said. On the other hand, Indian equities lured $23 billion worth of inflows last year, helped by a flood of money arriving in the fourth quarter. Zhikai Chen, head of Asia Equities at BNP Paribas Asset Management, said a growth recovery in the fourth quarter and implementation of key long-term policy reforms such as Production Linked Incentive schemes, labor code and agricultural reforms led to substantial inflows into Indian equities. India still has the second-highest number of coronavirus infections in the world. However, the number of active cases have reduced sharply over the past few months, prompting the country’s economy to be back in full swing. Asian equity markets have lured inflows of $26.8 billion in the fourth quarter of the year, the highest since March 2012, the exchange data showed. “Some macro, top-down investors would position on emerging equities as an asset class. When it happens, these are Korea, Taiwan, along with China which benefit most because of their weighting in emerging equities benchmarks,” said Societe Generale’s Benzimra.