NEW YORK Reuters Foreign net flows to emerging market equity and debt portfolios slowed in March to their weakest in almost a year as rising U.S. 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 nonChinese 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 selloff in 2018 or during the 2013 taper tantrum.
The uncertainty surrounding Turkey after its hawkish central banker was surprisingly sacked last month was one of the idiosyncratic events that has further weighed on appetite for EM assets, the IIF said.
Reporting by Rodrigo Campos; Editing by Chizu Nomiyama
Source Reuters