Emerging Asia ex-Japan equity fund investors have been selling down at almost the fastest rate since the global financial crisis in Q4 2008.

It’s a tricky time for emerging markets, subject to the whims of multinational advertisers as well as international investors. 

According to analysts from Nomura, more than US$30 billion has flowed out of dedicated Asia ex-Japan regional and country funds over the past 12 months, representing 1.5% of index market capitalization.

At the same time, demand for Japanese equity funds has risen among global investors, who have bought more than US$55 billion worth since mid-November 2012.

That said, sentiment turned in 2H 2013, from bullish to neutral. Japanese media equities appreciated significantly in Q4 2012 and through much of 2013, but shed some of these gains in a pricey market during Q1 2014. 

Nonetheless, only two of the Asia media indices tracked by industry analysts Media Partners Asia (MPA) are in negative territory for the year to March 10 close: TV Broadcasting; and Pay-TV & Broadband (see table below).

The slight dip in MPA’s TV Broadcasting index reflects partial sell-offs following year-end 2012 highs in Japanese free TV networks – TV Asahi (-11%), Tokyo Broadcasting (-8%) and Fuji Media (-5%).

In Pay-TV & Broadband meanwhile, investors continue to sell down India’s Dish TV, Hong Kong’s i-Cable and China’s Shenzhen Topway, due to deteriorating fundamentals.

A brighter Fairfax

Big equity gainers this year include Australian publishing company Fairfax Media, benefiting from significant cost savings. Fairfax’s print business remains in inexorable decline however, while its fast-growing digital revenues contribute only 16% of turnover.

That said, investors appreciate the cost cuts, as well as the company’s strong real estate portal Domain, in addition to mounting speculation on an incoming merger with leading media company, Seven.

China’s Renren, the operator of a Facebook-like social networking site, was also a big-time winner as of March 10.

However, Renren stock has since slipped significantly after another disappointing financial result, amidst weakness across the company’s advertising and gaming segments.

Disney's Innovation Drive Keeps Investors Happy

Disney remains an investor favorite, continuing to innovate in pay-TV and broadband distribution.

For example, a milestone carriage deal with US DTH giant Dish, which also has wireless broadband aspirations, provides long-term carriage for Disney’s existing services along with new channels, more affiliate fees, expanded on-demand and authenticated rights, plus streaming rights with a focus on dynamic ad insertion and mobile advertising.

The most interesting component is a plan to stream limited Disney content as part of a to-be-launched online offering for Dish’s broadband-only customers, as that may nudge cord-cutters and possible cord-nevers back to a traditional pay-TV offering.