Emerging countries lost US$ 4 billion in April, survey shows

The scenario of high risk sensitivity in global markets impacted assets of emerging countries in April, which registered a negative flow of US$ 4 billion in the month, according to the Institute of International Finance (IIF, its acronym in English) based on data collected. by the entity itself.

The IIF cites geopolitical risks, global inflation, monetary tightening and fears that the world economy will slow down as the main causes for the loss of appetite for emerging markets.

The stock market was what pulled the negative flow in April, with an outflow of US$ 9.5 billion, while emerging debt attracted US$ 5.5 billion. China, on the other hand, registered an inflow of US$ 1 billion in the stock market and an outflow of US$ 2.1 billion in debt securities.

According to the IIF, the weak performance of emerging equities was influenced by high volatility in equity markets in developed countries, as well as by lower investor appetite.

This volatility, according to the institution, is expected to continue in the coming months, and some emerging markets may recover after reaching very low levels, helped by an eventual rise in commodity prices.

Global monetary tightening, however, could dampen this momentum.

The IIF also cites that the war in Ukraine, despite contributing to the scenario of caution, has not hit emerging countries in a “catastrophic” way so far.

“Our high-frequency data recorded capital outflows in emerging equities – excluding China – but the episode is not close to the most serious in the last decade”, he says.

The information is from the newspaper. The State of São Paulo.