EM equities saw 10th week of outflows - JPMorgan

US equities were in demand last week in the wake of the Federal Reserve’s interest rate cut, but emerging market equities had fewer friends, with the sector seeing outflows for the 10th consecutive week, according to JPMorgan.

Data showed that more than 20 billion shares changed hands on U.S. exchanges on Friday, the busiest session since January 2021. 

The benchmark S&P index is up 1% so far in September, historically the weakest month for stocks, and has gained 19% year-to-date to reach all-time highs.

This positive tone on Wall Street contrasts with the selling seen in emerging markets, with JPMorgan noting that EM equities saw outflows of -$599mn this week, extending the selloff to ten weeks and -$13.6 billion in total.

Both ETFs (-$476mn) and non-ETFs (-$123mn) saw selling this week, the bank added. 

“Regionally, the accountability of the sell-off remains on Asia ex-Japan funds (-$687mn, from -$1.1bn) while EMEA (-$31mn, from -$94mn) also posted small redemptions,” JPMorgan said.

Global EMs received inflows of +$109mn and LatAm squeezed in marginal inflows of +$10mn after 13 weeks of outflows (-$1.8bn total). 

Looking at EM markets, India inflows extended to five weeks (+$1.6bn this week, +$7.4bn total), while Indonesia inflows accelerated to +$1.4bn. 

Taiwan recovered to net-purchase of +$806mn after three weeks of heavy redemptions (-$8.2bn total) even as Korea remained in the red (-$453mn). 

Thailand saw higher than average inflows (+$181mn), after record inflows last week of +$745mn. The Philippines (+$41mn) and Malaysia (+$18mn) also posted subscriptions, while Brazil saw small inflows (+$59mn) after outflows last week.

 

Source: Investing.com