Foreign investors pump in $25 bn in emerging markets this month
Equity flows were the dominant driver this month, with an estimated $14.6 billion in inflows, while debt flows were more moderate at $10.2 billion
New Delhi: Emerging markets has witnessed an inflow of $25 billion from foreign portfolio investors in this month so far, with equity segment becoming the dominant driver for funds, says a report.
Equity flows were the dominant driver this month, with an estimated $14.6 billion in inflows, while debt flows were more moderate at $10.2 billion, according to the report by Institute of International Finance.
Inflows were dominated by EM (emerging market) Asia, followed by Latin America, while EM Europe and Africa, Middle East saw modest outflows.
"Regionally, EM Asia saw total inflows of $19.1 billion, followed by Latin America with inflows of $8.7 billion, while there were modest outflows from EM Europe and AFME," the report noted.
Portfolio flows to EMs rose to $24.8 billion in July from $13.3 billion in the preceding month. Prior to that, emerging markets saw an outflow of $12.3 billion in May.
"In fact, July marked only the second month over the past year where portfolio flows were above their long-term average of $22 billion," it added.
The recovery in flows during the past few months follows a period of exceptional weakness in EM portfolio flows that began with China's mini-devaluation almost a year ago and saw cumulative outflows of $81 billion from EMs, compared to $96 billion during the global financial crisis.
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