Emerging markets have seen $23 billion in outflows since October: IIF
Non-resident investors have pulled a total of $23 billion from emerging market portfolios since early October, a survey released on Tuesday showed, including $18 billion since the US presidential election.
The move out of emerging market assets, largely accelerated by the surprise victory of Donald Trump in the November 8 US presidential contest, has triggered a substantial reversal in fund flows, the Institute for International Finance (IIF) reported. The outflows have triggered the longest continuous "reversal alert" since the organisation began issuing the notice in 2005.
Of the $18 billion in outflows since November 9, $11.3 billion came from debt securities. The IIF said outflows from emerging markets have moderated recently.
While Trump`s victory was seen as a major factor in the reversal of funds to emerging markets, which had seen inflows in every quarter so far this year, it was not the sole motivation.
"Nearly half of total outflows over the period were from Indian equities and bonds, partly reflecting the tumultuous situation following the controversial demonetisation initiative," the IIF wrote in a statement.
ALSO READ: US elects Donald Trump as President
"We have also seen particularly marked outflows from South African and Thai securities, both dealing with domestic hurdles."
Other catalysts for fund flight that the IIF highlighted were increasing uncertainty over Brexit, jitters about Chinese capital outflows, rising anticipation of a US interest rate hike in December - something that did occur - and Trump’s pro-growth, reflation agenda and his stance on immigration and trade.
Korean equities were the only asset tracked by the IIF to have recorded inflows during the period, most of which came since the impeachment of President Park Geun-hye.
All eight of the countries tracked by the IIF had outflows in the seven days ending November 14. The organisation tracks Indonesia, India, Korea, Thailand, the Philippines, South Africa, Brazil and Hungary.
ALSO READ: US Federal Reserve raises key interest rate, sees three hikes in 2017
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Senior Citizen Latest FD Rates: Know what major banks like SBI, PNB, Canara Bank, HDFC Bank, ICICI Bank are providing on fixed deposits
Gratuity Calculator: Rs 38,000 as last-drawn basic salary, 5 years and 5 months of service; what will be gratuity amount?
Top 5 Small Cap Mutual Funds with best SIP returns in 1 year: See how Rs 25,000 monthly investment has grown in each scheme
Top 7 SBI Mutual Funds With Best SIP Returns in 1 Year: Rs 25,000 monthly SIP investment in No.1 fund has jumped to Rs 3,58,404
11:49 AM IST