Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Emerging market portfolios post longest streak of monthly outflows on record - IIF

Economy Aug 03, 2022 08:46AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: A employee counts Colombian pesos at a store in Bogota, Colombia December 28, 2018. REUTERS/Luisa Gonzalez//File Photo

NEW YORK (Reuters) - Emerging markets posted a fifth straight month of portfolio outflows in July, setting the longest such streak in records going back to 2005, as global recession risk, inflation and a strong dollar drew away cash, data from the Institute of International Finance (IIF) showed on Wednesday.

Non-residents pulled $9.8 billion out of emerging market portfolios in July, the data show, compared with an outflow of $3.8 billion in June and a $35.1 billion inflow in July 2021.

Net outflow over the past five months totaled $39.3 billion, according to the IIF.

Cash has left emerging markets partly because developed economies have reversed years of very low interest rates to try to put a cap on inflation. Russia's invasion of Ukraine in February triggered a spike in food and energy prices that increased their challenge.

Commodity exporters, many in emerging markets, gained revenue and attracted investment, and heightened payments to them also countered dollar strength - but only for a while.

"Most of the recent dynamics in flows can be attributed to the dollar," IIF economist Jonathan Fortun said in a statement, noting that following a string of interest rate hikes the U.S. Federal Reserve could be approaching a "neutral" rate. Reaching it and achieving some stability in U.S. interest rates could help stem the outflows.

But on Tuesday a trio of Fed officials from across the policy spectrum signaled that they and their colleagues remained "completely united" on getting U.S. interest rates up to a level that would more significantly curb economic activity and put a dent in the highest inflation since the 1980s.

The dollar index 21-day moving average closed on Tuesday at its highest level since mid-November 2002.

"For the coming months, several factors will influence flows dynamics," said Fortun. "Among these (are) the timing of inflation peaking and the outlook for the Chinese economy."

July saw inflows of $2.5 billion to emerging-market equity portfolios outside of China, the first month of inflows since February, while ex-China emerging-market debt posted $6.0 billion in outflows. China saw a net outflow of $6.4 billion, with $2.9 billion leaving debt portfolios and $3.5 billion exiting equities.

Emerging market portfolios post longest streak of monthly outflows on record - IIF
 

Related Articles

Coupang Shares Slide as Revenue Misses Expectations
Coupang Shares Slide as Revenue Misses Expectations By Investing.com - Aug 11, 2022

By Sam Boughedda Coupang (NYSE:CPNG) shares are down 2.8% on the back of its earnings release aftermarket Wednesday. While earnings topped analyst expectations, revenue missed...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email