Portfolio flows to emerging markets at $29.8B in September

Institute of International Finance reports ‘slowing in Chinese growth’

Portfolio flows to emerging markets (EM) stood at $29.8 billion in September, according to the latest data released by the Institute of International Finance (IIF) on Wednesday.

“Market jitters surrounding the Evergrande crisis in China hurt the performance of flows into EM, especially on the equity side,” the global body said on Wednesday.

“While the uncertainty surrounding the Fed normalization dominated the risk drivers towards EM, we now see a slowing in Chinese growth, and by extension commodity prices, and whether policy makers step in to offset those risks as the main concerns for the EM complex in the following months.”

It added that inflationary pressures across the market have had a negative impact on the outlook and “put focus on the capacity of policymakers on managing monetary dynamics.”

“Nevertheless, EM central banks continue to normalize, creating a buffer should economic growth start to surprise on the downside next year,” read the report.

“Moving forward, with inflation in many developing nations close to peaking we see the flows perspective improving in the near future.”​​​​​​​


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