The $ 6 billion shift from emerging markets … and a Chinese bond surprise

Foreign investors withdrew money from emerging market bonds and equities outside of China in August, according to data released Wednesday by the Institute. of International Finance, the first outflow of such inflows since March 2020.

A report from the institution showed that fixed income instruments in emerging markets Excluding China, it suffered a $ 2.8 billion portfolio outflow, while equities lost $ 3 billion last month, when investors were concerned about the Federal Reserve’s plans to reduce the stimulus.

But despite a severe Chinese regulatory crackdown, the country raised $ 10.1 billion in inflows, nearly two-thirds of which went to bonds. Earnings in China made overall emerging market debt flows positive.

Markets saw rapid changes in August as signs of rising US inflation data raised expectations that the Federal Reserve might pursue plans to reduce stimulus. in a time of slow growth. Emerging market equities ended the month in up 2.4%, but after falling to a 9-month low.

Since then, the titles in via growth rates increased further as fears of too rapid Fed action eased after the Jackson Hole annual central bank conference and disappointing US employment figures.

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