NEW YORK (Reuters) - Emerging market stocks and bonds saw foreign net inflows in July and for a second consecutive month, but the outlook remains uncertain as the region struggles out of the current slump, the Institute of International Finance said on Monday.
Portfolio inflows to emerging markets slowed to $15.1 billion in July from a downwardly revised $29.2 billion in June, the bulk of it in debt securities, the IIF said.
"The shape of the recovery will be dependent on the capacity of the (emerging markets) complex to put in place efficient policies to catalyze a recovery," the IIF said in a statement. "Moving forward, we see investors being more discerning regarding investment decisions towards EM."
Debt flows accounted for $13.2 billion of the total last month, while non-Chinese emerging market stocks attracted some $2.3 billion, the data showed. Chinese equities saw outflows of $0.4 billion, weighed by the hardening confrontation between China and the United States.
The small outflow in China stocks compares to more than $12.7 billion outflows in March, which was followed by over $9 billion in inflows during the second quarter, IIF data show.