Foreigners pull money out of EM portfolios after five months of inflows
Foreigners pulled money from emerging markets in April, with outflows from Indian and Indonesian stocks leading to a -$0.7 billion net outflow. China equities also saw small outflows in April.
pulled money out of their emerging market portfolios in April on concerns of a tighter monetary policy path in the U.S., with from in and leading the way, data from a banking trade group showed.The data showed net non-resident portfolio flows for April came in at -$0.7 billion, the first monthly outflow since October.
The figure compares with net inflows of $30.2 billion in March and a $16.3 billion inflow in April 2023, the IIF data show.
Flows out of ex-China stock portfolios were the main culprit for the overall negative flow, with $3.8 billion leaving the regional asset class. Ex-China debt posted a $2.7 billion inflow.
Chinese stocks saw a $0.6 billion outflow while debt posted April inflows of $0.9 billion, a seventh consecutive positive month.
"EM ex-China equity has seen outflows, mainly attributed to the more hawkish stand by the (U.S. ) and the prospects of looser monetary stance disappearing," said via email IIF economist .
"China equities have followed a same path and April saw small outflows in this category too. Having said that, we see China's stocks gaining momentum, especially if stimulus policies meet market expectations."
After having priced-in a rate cut from the Fed in the first half of the year for months, a 25 basis-point reduction in the benchmark rate is only priced in for September, data from the CME FedWatch tool show.
Source: Stocks-Markets-Economic Times
