Why Foreigners 'Buy America'
Foreign investors, net buyers of $81 billion of U.S. securities in November, shook off longstanding concerns about a weak dollar and unease over rising U.S. interest rates.
But many analysts -- and foreign investors themselves -- are skeptical that the U.S. can continue attracting overseas capital at such a heady pace. Some even warn that the November figure, the most recent data available and released earlier this week, may represent a near-term high-water mark.
"The dollar continues to be supported primarily by foreign central-bank purchases of U.S. debt," noted RBC Capital Markets in a report to clients. The dollar, which has been rising in recent days, is at a two-month high against the euro. But sentiment remains largely bearish as it was in November, when foreign purchases of U.S. assets were made. Yesterday, the dollar strengthened again: The euro fell against the currency to $1.2973, and the dollar rose to 103.33 yen.
November's net foreign purchases were all the more impressive coming after the relatively modest net foreign buying of $48 billion in October, the lowest monthly total since October 2003, according to the Treasury Department.
Asian central banks bought approximately $28 billion of U.S. government bonds in November, estimates Sabrina Jacobs , an economist at Dresdner Kleinwort Wasserstein in Singapore. Foreign investors were also net buyers of $14.5 billion of U.S. stocks -- reversing a trend where they were net sellers of these stocks during five of the previous eight months -- as they joined American investors in a powerful rally that followed the presidential election.
The $81 billion of net purchases comfortably exceeded the $65 billion to $70 billion needed each month to fund the deficit in the U.S. current account, a broad measure of trade in goods and services plus certain financial transfers. The release of the November figures this week has also been lending some support to the dollar.
Yet with the U.S. trade deficit ballooning to record levels, the dollar still wobbly and the U.S. stock market behaving erratically despite a relatively bullish profit outlook, future foreign purchases could be more muted.
Joseph Quinlan, chief market strategist with Banc of America Capital Management, says, "Those levels will be tough to repeat." He adds that he expects foreign net purchases will be closer to the $50 billion monthly level seen in previous years. "The November figures most likely represent a peak in U.S. capital flows."
Foreign flow data tend to be volatile and seasonal, particularly between October and November. Still, one of the more puzzling aspects of the November data is why foreign inflows were so strong during a month when the dollar fell 4.1% against the euro and 3.3% against the yen.
Some economists suggest that many overseas investors hedged against the possibility of a weakening dollar with derivatives and other financial instruments, so that they could bet on the performance of U.S. stocks or bonds without being exposed to the movements of the dollar. "In this case, the weak U.S. dollar wouldn't matter," says Mamoru Yamazaki, an economist with Barclays Capital in Tokyo.
Ben Walker, a senior investment manager at Gartmore Investment Management in London, attributes the broad-based European appetite for U.S. shares to several factors, including a positive reaction to the U.S. elections.
"George Bush's convincing victory gave him a clear agenda, and he's considered business friendly," Mr. Walker notes. Two additional factors were the fall in oil prices to $45 a barrel from $55 and the dollar's decline, which "is good for the profits of U.S. corporations that have large foreign businesses."
Similar postelection calculations were made in Asia. "People believed that the U.S. economy was going to be on a more certain footing," said Philip Niem, investment strategist for Asia at Barclays Private Bank in Hong Kong.
Asian central bankers remain the largest buyers of U.S. bonds as part of an effort to keep their currencies steady. As investors poured money into the region looking for high-yielding assets and betting, in part, on Asian currency appreciation, Asia's central bankers mopped up the flows by purchasing U.S. government debt -- in effect, recycling dollars and other currencies flowing in and investing them in the U.S.
While the Bank of Japan, the largest holder of dollar-denominated reserves, likely didn't play a large role in the November buying -- it hasn't publicly intervened in the foreign-exchange markets since March -- Japan's private citizens did. They snapped up U.S. government securities, thanks to higher U.S. bond yields versus Japan's fixed-income investments or bank accounts. Overall, Japanese banks and life insurers led bond purchasing for November, government data show, while the Japanese public sector was a net seller.
In South Korea, officials at some of the country's largest banks say many clients also are investing in funds that hold U.S. securities and bonds, partly because Koreans aren't optimistic about their domestic economy. The government expects about 5% growth this year, but some private securities houses forecast growth to be about 4%. Domestic demand is expected to be in the doldrums this year and the real-estate market unexciting.
But many in Asia think November's sharp increase in U.S. investments doesn't seem a sustainable trend. Asian economies are expected to grow by approximately 5% to 6% in 2005, a slower pace than last year, but still outpacing Europe and the U.S. and making local investments more attractive.
"You have three kickers: yield, capital appreciation and the prospect of currency appreciation," says Mark Bowden, head of equities for Merrill Lynch in Singapore. "It's a pretty good case for buying Asian equity."
Moreover, Asian central banks are slowly diversifying away from holding U.S. dollar assets, say economists. "Chinese purchases of U.S. securities have basically lagged the pace of increase in the foreign-exchange reserves," says Sun-Bae Kim, an economist for Goldman Sachs in Hong Kong. "The gap has been noticeable."
Meanwhile, Gartmore's Mr. Walker predicts that the U.S. stock market would underperform international markets, "due to slowing corporate profit growth and rising U.S. interest rates." He also noted that Wall Street was a relatively expensive market, selling at 17 times earnings, compared with Europe, which is selling at under 13 times earnings. "When investors come to realize this underperformance, foreign inflows will slow," he predicts.
外资看好美国资产
外国投资者摆脱了长期以来对美元走软以及美国利率走高的担忧。去年11月外国投资者净买入了810亿美元的美国证券。
但许多分析师，包括外国投资者自己，都对美国能否继续吸引大量外国资金表示怀疑。有人甚至警告说，11月份的数据可能是近期的最高水平。该数据于上周初发布，是能够得到的最新月度数据。
RBC Capital Markets在给客户的报告中指出，美元仍继续受到外国央行购买美国债券为主的支撑。美元兑欧元目前位于两个月来的高点。但市场人气仍与去年11月外国投资者大量买入美元证券时一样低迷。上周四，美元再度走强：欧元跌至1.2973美元，美元升至103.33日圆。
根据财政部(Treasury Department)的数据，去年10月份外资买进美国证券的数额为480亿美元，是2003年10月以来的最低月度水平，相比之下，11月份的数据就更令人印象深刻。
Dresdner Kleinwort Wasserstein驻新加坡经济学家萨布里纳?雅各布斯(Sabrina Jacobs)预计，亚洲央行在11月份买进了大约280亿美元美国政府债券。
外国投资者也加入了美国投资者在总统大选后的入市热潮，净买入了145亿美元的美国股票，扭转了此前8个月中有5个月净卖出美国股票的趋势。
810亿美元的净买入额轻松超过了弥补美国经常项目赤字所需的每月650亿至700亿美元的筹资额。上周公布的11月份数据也给美元提供了部分支撑。
但随著美国贸易逆差上升至创纪录的水平，美元走势依然动荡，尽管收益预期比较看好，美国股市也摇摆不定，因此今后的外国买盘可能更加低迷。
Banc of America Capital Management的首席市场策略师约瑟夫?昆兰(Joseph Quinlan)说，这一水平很难重现。他预计外资净流入量将接近于2003年每月500亿美元的水平。11月份的数据很有可能是美国资本流入的顶峰。
外资流量数据波动较大，而且易受季节因素影响，尤其是在10至11月份。11月份数据中最令人疑惑不解的一个方面是，当月美元兑欧元下跌4.1%，美元兑日圆下跌3.3%，外资为何会在这样的一个月份中如此踊跃地流入美国。
部分经济学家认为，许多海外投资者利用衍生工具及其他金融工具中对冲美元走软风险，然后在不受美元动荡影响的条件下针对美国股市和债市的表现进行投资。巴克莱(Barclays Capital)驻东京经济学家Mamoru Yamazaki说，在这种情况下，美元走软无关紧要。
Gartmore Investment Management驻伦敦高级投资经理本?沃克(Ben Walker)将欧洲投资者对美国股票的兴趣归结为几个因素，其中包括对美国大选的积极反应。
沃克指出，乔治?布什(George Bush)明显获胜使他有了明确的议事日程，人们普遍认为布什的政策对商界有利。另外两个因素是油价从每桶55美元下跌至45美元，以及美元走低，这会有利于拥有大量海外业务的美国企业的利润。
Barclays Private Bank驻香港亚洲投资策略师菲利普?尼姆(Philip Niem)说，大选后，亚洲投资者的看法也大致相同。人们认为美国经济增长的基础会更加稳固。
亚洲央行仍是美国债券的最大买家，这是其稳定本国货币的手段之一。随著寻找高收益资产及预计亚洲货币将升值的资金大量涌入亚洲地区，亚洲央行需要通过购买美国国债吸纳这些资金，也就是说，回收流入的美元和其他外汇，然后再投资于美国。
尽管日本央行(Bank of Japan)在11月份可能并未大量买入美国证券，但日本投资者的作用却不容忽视。由于美国债券收益率高于日本固定收益投资或银行投资收益率，他们大量买进美国国债。政府数据显示，总体而言，日本银行及人寿保险公司是11月份买进美国证券的生力军，而日本政府部门则是净卖出者。
在韩国，一些大型银行的管理人士称，许多客户也投资了持有美国股票和债券的基金，原因之一就是韩国国内经济不容乐观。政府预计今年的经济增长率约为5%，但部分私有证券机构预计增长率约为4%。预计国内需求低迷不振，而房地产市场将波澜不兴。
但亚洲许多人士认为，11月份在美投资的大幅增加难以持久。预计亚洲国家2005年的经济增长率约为5%-6%，低于2004年，但仍高于欧洲和美国，使投资亚洲更具吸引力。
美林(Merrill Lynch)驻新加坡证券部负责人马克?博登(Mark Bowden)说，要考虑的因素有三个：收益率、资本升值和外汇升值的前景。买进亚洲股票是非常好的选择。
而且，经济学家表示，亚洲央行也在逐步从持有美元资产转向多元化的投资策略。高盛(Goldman Sachs)驻香港经济学家金□培(Sun-Bae Kim)称，中国购买美国证券的增幅低于其外汇储备增加的速度。差额非常显著。
与此同时，Gartmore的沃克预计，美国股市的表现将弱于国际市场，原因是美国企业利润增速放缓及美国利率走高。他还指出，美国股市股价较高，本益比为17倍，而欧洲股市的本益比不到13倍。他预计，当投资者意识到这种情况时，外资流入就会减速。
