Emerging companies have the longest monthly run of resources since 2015, says survey

Emerging markets suffered a fourth straight month of portfolio outflows in June, the longest streak of losses in seven years, as fears of recession and inflation rattled investors, data from the Institute of International Finance (IIF) showed.

June registered a negative flow of non-residents in the amount of US$ 4 billion, according to data published this Wednesday (6), compared to outflows of US$ 5.1 billion in May and inflows of US$ 55.8 billion in June. of 2021.

The current string of resource losses equates to a four-month negative streak ending in October 2015. Net outflows over the past four months totaled $27.8 billion, according to the IIF.

“We are in a global shock of interest rates and high inflation,” IIF economist Jonathan Fortun said in a statement.

“Yields on longer-term government bonds have risen sharply in advanced economies, which tightens financial conditions, weighs on growth and increases risk aversion. This mechanism weighs on flows to emerging markets.”

Outflows from emerging market equity portfolios in June — worth $19.6 billion, not including China — were the biggest for any month since March 2020, when markets panicked over lockdowns against to Covid-19.

China posted a net inflow of $6.6 billion, the result of withdrawals of $2.5 billion from debt portfolios and purchases of $9.1 billion in equities — the biggest monthly inflow for Chinese equities so far this year. .

The data still show net outflows of more than US$ 10 billion in the year to the country.

Source: CNN Brasil

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