Dec 20 Non-resident investors have pulled a
total of $23 billion from emerging market portfolios since early
October, a survey released on Tuesday showed, including $18
billion since the U.S. presidential election.
The move out of emerging market assets, largely accelerated
by the surprise victory of Donald Trump in the Nov. 8 U.S.
presidential contest, has triggered a substantial reversal in
fund flows, the Institute for International Finance reported.
The outflows have triggered the longest continuous "reversal
alert" since the organization began issuing the notice in 2005.
Of the $18 billion in outflows since Nov. 9, $11.3 billion
came from debt securities. The IIF said outflows from emerging
markets have moderated recently.
While Trump's victory was seen as a major factor in the
reversal of funds to emerging markets, which had seen inflows in
every quarter so far this year, it was not the sole motivation.
"Nearly half of total outflows over the period were from
Indian equities and bonds, partly reflecting the tumultuous
situation following the controversial demonetization
initiative," the IIF wrote in a statement. "We have also seen
particularly marked outflows from South African and Thai
securities, both dealing with domestic hurdles."
Other catalysts for fund flight that the IIF highlighted
were increasing uncertainty over Brexit, jitters about Chinese
capital outflows, rising anticipation of a U.S. interest rate
hike in December - something that did occur - and Trump's
pro-growth, reflation agenda and his stance on immigration and
Korean equities were the only asset tracked by the IIF to
have recorded inflows during the period, most of which came
since the impeachment of President Park Geun-hye.
All eight of the countries tracked by the IIF had outflows
in the seven days ending Nov. 14. The organization tracks
Indonesia, India, Korea, Thailand, the Philippines, South
Africa, Brazil and Hungary.
(Reporting by Dion Rabouin; Editing by Leslie Adler)