Emerging Markets Receive Surprise Bumper Inflows for March 2016

Emerging Market Inflows topped $36Bn for March a near $30Bn increase over the previous month.

Cadwell & Schultz

Emerging Markets Receive Surprise Bumper Inflows for March 2016

The Institute of International Finance out of Washington announced today that Emerging Market inflows had reached almost 2 year highs.

The lion's share of the outflows went to Asia, totaling $20.6Bn and showing that the region is still looked at attractively for returns and opportunities. Latin America followed with $13.4Bn. The South American continent has seen its fair share of political turmoil over the last few years and there are views that many of those nations that have seen an economic downturn could be ripe for a turnaround. This is no more relevant than in Brazil which saw inflows of over $2Bn on its Equity markets.

Phil

Davey

The IIF which is the main overseer of Foreign Capital Flows announced that $36.8Bn had been moved in the month of March. This is significantly higher than February’s figure of $5.4Bn and a level not seen since June 2014.

The lion’s share of the outflows went to Asia, totaling $20.6Bn and showing that the region is still looked at attractively for returns and opportunities. Latin America followed with $13.4Bn. The South American continent has seen its fair share of political turmoil over the last few years and there are views that many of those nations that have seen an economic downturn could be ripe for a turnaround. This is no more relevant than in Brazil which saw inflows of over $2Bn on its Equity markets. Brazil’s economy and its markets have been underperforming yet the hope for some political reforms in the near future make the risk to reward tolerable.

Across the board, the investments where split evenly between bonds and stocks, Bonds accounting for $18.9Bn and Equities taking the remaining $17.9Bn.

Considering the huge jump from February’s outflows there is reason to believe the move was a speculative play ahead of April’s possible rate hike by the Federal Reserve and the subsequent affects this may have.

Either way, the data from March shows that diversifying overseas is still an attractive option when the domestic markets aren’t providing the returns or security usually associated with them.    

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Categories: Economy, Economy, Investments

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