금융시장
Money Flow Analysis Series (28) : Recent Fund Flow Trends and Issues
2010-02-18KIM, Wan-Joong
목차
요약
Recent trends in market fund flows
Market funds continue to be concentrated in short-term, liquid asset classes, leading to double-digit growth in M1. Weak private sector demand for funds and the conservative lending stance of the financial sector resulted in relatively low growth in M2 and Lf.
Reduced money supply form the government and foreign sectors is likely to lead to a
contracting short-term monetary base, but market liquidity will continue to slow due to
weak private sector credit supply.
Key issues in market fund flows
Restructuring of the short-term fund market : Under the short-term fund market reform
proposal, the call market will become a bank-oriented reserves market, and non-bank
institutions will become more active in the RP market. In addition, a short-term corporate bond proposal is under consideration which would allow firms to access funding under more favorable terms through the CP market.
Concentration of market funds in short-term, liquid assets : Market funds are beginning to circulate once more as they flow out of MMFs, but most of these funds are flowing to other short-term asset classes with higher yields, and this risk aversion is unlikely to dissipate significantly.
Continuing inflows to the banking sector : Market funds are clearly flowing to bank deposits, and this trend is being driven by outflows from MMFs due to declining yields and equity fund redemptions. Inflows to the banking sector are likely to continue due to weak investment capacity by economic agents, a growing need for deposits in anticipation of tightened liquidity regulations, and the increasingly conservative stance of financial firms.
Bank lending and SME loan deterioration : SME loan growth in H1 2009 was driven by
government support measures, and these loans may deteriorate. Following the normalization of the government’s credit guarantee policies, SMEs will face a more difficult funding environment, which could drive up loan delinquencies. Loans extended to SMEs undergoing restructuring should be closely monitored.
Outflows from equity funds : Redemptions of equity funds continued in 2009 due to profit- taking by investors driven by rising stock prices. In the near term, inflows to indirect investment products are unlikely due to the termination of tax benefits on funds, the lack of confidence in the fund market, and low expectations for the stock market.
Inflows of foreign investment capital : Net foreign buying of stocks and bonds continued in 2009 as the financial turmoil eased and the economy began to recover. In light of the dollar carry trade and continuing fiscal expenditures, net foreign selling is unlikely.
Market funds continue to be concentrated in short-term, liquid asset classes, leading to double-digit growth in M1. Weak private sector demand for funds and the conservative lending stance of the financial sector resulted in relatively low growth in M2 and Lf.
Reduced money supply form the government and foreign sectors is likely to lead to a
contracting short-term monetary base, but market liquidity will continue to slow due to
weak private sector credit supply.
Key issues in market fund flows
Restructuring of the short-term fund market : Under the short-term fund market reform
proposal, the call market will become a bank-oriented reserves market, and non-bank
institutions will become more active in the RP market. In addition, a short-term corporate bond proposal is under consideration which would allow firms to access funding under more favorable terms through the CP market.
Concentration of market funds in short-term, liquid assets : Market funds are beginning to circulate once more as they flow out of MMFs, but most of these funds are flowing to other short-term asset classes with higher yields, and this risk aversion is unlikely to dissipate significantly.
Continuing inflows to the banking sector : Market funds are clearly flowing to bank deposits, and this trend is being driven by outflows from MMFs due to declining yields and equity fund redemptions. Inflows to the banking sector are likely to continue due to weak investment capacity by economic agents, a growing need for deposits in anticipation of tightened liquidity regulations, and the increasingly conservative stance of financial firms.
Bank lending and SME loan deterioration : SME loan growth in H1 2009 was driven by
government support measures, and these loans may deteriorate. Following the normalization of the government’s credit guarantee policies, SMEs will face a more difficult funding environment, which could drive up loan delinquencies. Loans extended to SMEs undergoing restructuring should be closely monitored.
Outflows from equity funds : Redemptions of equity funds continued in 2009 due to profit- taking by investors driven by rising stock prices. In the near term, inflows to indirect investment products are unlikely due to the termination of tax benefits on funds, the lack of confidence in the fund market, and low expectations for the stock market.
Inflows of foreign investment capital : Net foreign buying of stocks and bonds continued in 2009 as the financial turmoil eased and the economy began to recover. In light of the dollar carry trade and continuing fiscal expenditures, net foreign selling is unlikely.