Analysts believe the fund inflows are a result of the third round of quantitative easing in the United States. On Sept 13, the Federal Reserve announced that it will start buying $40 billion in mortgage-backed securities every month, with the end date remaining up in the air.
Operation Twist, in which the Fed sells short-term bonds and buys long-term assets, will continue. Together, the two programs will add $85 billion of short-term assets and cash into the money market each month.
Most of the liquidity is likely to flow to emerging markets, including Asia, where growth is more robust.
Leung said it's still hard to measure the exact size of the inflows, but authorities will watch the situation closely.
To provide a glimpse of the size of the inflow figures from EPRF Global, which tracks nearly 45,000 funds managing more than $17.5 trillion in total assets, show that up to $600 million flowed into funds tracking Chinese equities during the final week of October.
Alarmingly, asset prices reacted quickly to the inflows. The benchmark Hang Seng Index was up more than 5 percent over the past month and 14 percent since September. The index rose 1.2 percent, or 253 points, to 21442 points at its close on Wednesday.
Meanwhile, the property market remained buoyant despite an Oct 26 decision to impose a 15 percent buyers' stamp duty on non-locals.
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