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Foreign investors pour $33.9bn into EMs

Foreign investors pour $33.9bn into EMs

Emerging market (EM) securities attracted $33.9 billion in foreign capital in November, data from the Institute of International Finance (IIF) showed.

In fact, November was the best month for net non-resident portfolio flows to EMs since January, indicating a revival in investor demand for EM assets after a weak six-month stretch.

Global money managers such as UBS Wealth Management, Credit Suisse Private Banking and T Rowe Price are also positive on the region’s securities because of cheap valuations and solid economic growth expectations.

According to IIF data, EM equities gathered $12 billion last month, buoyed by strong flows of $8.5 billion to Chinese equities.

EM bonds, meanwhile, attracted $21.8 billion in inflows broadly spread across all markets. This marked the best month for EM debt since April.

In terms of regions, emerging Asia received the most capital with foreign investors pumping $23.9 billion through debt and equity investments.

This was followed by emerging Europe and Latin America, which received $4.3 billion and $3.3 billion respectively.

Portfolio flows tracked by IIF include capital flows arising from the transfer of ownership of a financial asset between resident and non-residents of a country.

Total foreign portfolio inflows into EMs have now reached $195 billion year-to-date, which is $160 billion lower than the same period last year, according to IIF estimates.

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