NEW YORK: Foreign net flows to emerging market equity and debt portfolios slowed in March to their weakest in almost a year as rising US yields continue to weigh on EM, with flows excluding China barely making a blip last month, data from the Institute of International Finance showed on Monday.
The net estimated $10.1 billion in flows in March was the lowest monthly figure since April 2020 and compares with a downwardly revised $23.4 billion net inflows in February.
China took in nearly 90% of net flows last month with $3.8 billion going to equities and $5 billion to Chinese debt instruments. Excluding China, EM equities funneled $0.2 billion while $1.2 billion flowed to non-Chinese debt.
“Despite the disappointing readings, some positive support to flows remains, stemming from increasing commodity prices and constructive balance of payments dynamics,” the IIF said in a note. “Our view is that contagion risk is less severe than during the EM sell-off in 2018 or during the 2013 taper tantrum.”
Comments
Comments are closed.