• Thursday, March 28, 2024
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Portfolio inflows to emerging markets hit 3-month low in March

Portfolio inflows to emerging markets hit 3-month low in March
Portfolio inflows to emerging markets were down to their lowest level in three months since the start of the year at $25 billion in March 2019, data from the Institute of International Finance (IIF) show.
This implies that portfolio into the emerging market space reduced by a fifth from $31.2 billion reported in February to $25 billion in the third month of 2019.
Emerging stocks and bonds attracted positive but modest residents and non-residents inflows in March, after a strong performance in January and February (with inflows of $52.6bn and $31.2bn).
Analysts at IIF position that positive catalysts driving the region are dovish shift from the United States’ Central Bank, Federal Reserve, and constructive trade talks between the world’s biggest economies.
“Many Emerging Markets currencies have fallen sharply this year, failing to benefit from the more constructive backdrop,” the analysts state.
Debt inflows into the emerging market space dropped by $6 million to $17.6 billion in March compared with $18.2 billion in the previous month.
The level of debt inflows was mainly driven by inflows to Asia ($10bn) and Latin America ($3.9bn), with both regions accounting for 79 percent in debt inflows.
The report further shows that equity inflows into emerging markets ended at $8.1 billion in March, while reading for EM ex-China equity flows stood at $6.6 billion, and China flows were $1.6 billion.
The IIF avers that their broader measure of net capital flows to emerging market was $2.4 billion in February, and revisions prompted by quarter four of 2018 data for many countries, suggesting that the region saw small outflows in January contrary to the net inflows the institute earlier estimated.
Net capital flows to the region in February were driven by positive flows of $14.7 billion to China, after witnessing outflows for eight consecutive months.