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Asian Funds Gaining Investments

An estimated $108 million worth of fresh investments flowed into Asian equity funds in the last week, signaling that foreign investors are finding Asia funds attractive again. Analysts say the sell-off in May boosted investor`s confidence and is doing the region`s stock market good in terms of performance. How the fighting in the Middle East between Hizballah and Israel was not mentioned, though previous financial forecasts in past weeks have estimated that the effects of war in that region have the potential to cause waves of economic problems elsewhere.

Shane Oliver, head of investment strategy at AMP Capital Investors told says, "Inflation risks remain, it will take a while for investors to be sure the U.S. will have a soft and not a hard landing, the oil price remains a threat and the period out to October is often poor for shares." Citigroup said China, India and Thailand attracted most of the fresh capital infusion.

The decision of the U.S. Federal Reserve on Tuesday to not raise key interest rates is also seen as a boost in Asia to further shore up market. However, some analysts say the renewed interest in the Asian markets will not be as heavy as during the first quarter of the year because of the slowing U.S. economy, rising oil prices and the fear the U.S. Fed might change its mind and hike interest rates again soon.