Global market turbulence has triggered the biggest outflows from emerging market equities in more than a year.
Investors removed $9bn from stocks and shares across Africa, Latin America, eastern Europe and Asia in October, according to figures from the Washington-based Institute of International Finance, which tracks all cross-border investment into developing countries by non-residents.
Cooling sentiment towards emerging markets because of slowing growth in China and unwinding monetary stimulus in the US has been exacerbated by general nervousness about uneven global growth.
The FTSE Emerging index, which consists of developing countries including China, Brazil and India, has lost more than 10 per cent since early September.
自9月初以来，涵盖中国、巴西和印度等发展中国家的富时新兴市场指数(FTSE Emerging markets index)已下跌逾10%。
“Overall, flows to emerging markets have ground to a halt,” said IIF chief economist Charles Collyns. “There has been some stabilisation in recent days but we expect the pattern of rising risk aversion and shifting Fed rate expectations to continue.”
Outflows have been particularly pronounced in emerging Europe, where Russia’s conflict with Ukraine has left Russian companies facing a possible credit crunch unless western sanctions are relaxed, according to credit rating agency Moody’s.
However, figures from the IIF show that equity flows were waning across all emerging markets, including Latin America and emerging Asia, where the Chinese ecommerce company Alibaba made the world’s largest stock market debut in September.
“When markets are calm investors tend to differentiate between countries more,” said Paul McNamara, a fund manager at GAM. “But right now there has been a blanket reaction across the sector. There have been some domestic problems in places such as Russia, Venezuela and Argentina but what’s happening is really being driven by the developed world.”