JPM Indo: US$60bn redemption in US money market

* US$60bn redemption in US money market; where will the money go next?
* Indo economics: budget revision underscores financing flexibility. Sales view: buy Indo banks.
* The JPMorgan view: disinflation, not deflation

Fund flow: US$60bn redemption in US money market, the highest since Oct 2008
During the week to 17th March, there were inflows into all international equity funds, except Developed Europe equity funds. The net flows by mandate were:
· Total EM equity funds US$1.5 billion subscription
· Developed Europe equity funds US$ 1 billion redemption, the highest since June 2009.
· US equity funds US$2.8 billion subscription
· US bond market US$5.2 billion subscription; inflows into bond funds for 53 consecutive weeks.
· US money market US$60 billion redemption, the highest since October 2008.

Net foreign buying/selling activity:
Inflows into all emerging markets except Philippines. Notable flows:
· Korea US$1 billion inflows
· India US$ 740 million inflows
· South Africa US$306 million inflows
· Thailand US$243 million inflows
· Indonesia US$165 million inflows

For countries that do not publish official foreign transactions in their equity markets, we use the monthly data from EPFR Global (they cover 12,000 international, EM and US funds with total net assets greater than US$ 6 trillion). During the month of January, funds were net buyers in Australia and Turkey. Funds were net sellers in Singapore, Hong Kong, China, Malaysia, Mexico, Russia, Chile and Poland.