NEW YORK : The China versus rest of rising markets divide in international portfolio flows continued in January as $8.8 billion net flows to the world’s second-largest economic system contrasted with the $7.7 billion in outflows from the rest of EM.
Foreign net portfolio inflows to rising markets in January had been at $1.1 billion, the bottom since final March, information from the Institute of International Finance confirmed. The determine compares to inflows of $79.7 billion in January 2021 and $15.8 billion in December.
“We see investors pulling money from emerging markets’ bonds and equities at the fastest pace since March 2021, as anxiety builds over tighter monetary conditions, geopolitical frictions and fears that many economies will not recover quickly enough from the pandemic this year,” stated Jonathan Fortun, IIF economist, in a report.
The IIF stated final quarter that flows to ex-China EM had suffered a “sudden stop.”
Chinese debt took in $9 billion final month whereas equities noticed their first month of net outflows since September 2020 at $0.2 billion.
The rest of rising markets noticed net outflows of $4.5 billion in debt, probably the most since March 2020, whereas the $3.2 billion outflow in equities was the biggest since October 2021.
Regionally, Latin America noticed a net influx of $6.5 billion, all associated to equities, coinciding with a large outperformance from the area’s shares in contrast with each EM friends and developed markets final month.
(Reporting by Rodrigo Campos; Editing by Chizu Nomiyama)