IIF Releases New Emerging Market Portfolio Flows Tracker

March 13, 2014
 

Washington, D.C., March 13, 2014 - The Institute of International Finance today released a new indicator that tracks aggregate portfolio flows to emerging market countries on a monthly basis.

Emerging market external vulnerabilities have come to the fore in recent months, underscoring the importance of monitoring international portfolio flows. However, data limitations make it difficult to track these flows in real time:

 

 

  • Some data sources are comprehensive, but not timely-especially balance of payments data.
  • Other data sources are timely, but not comprehensive-such as EPFR data.

IIF believes this new tracker will provide a timelier and more accurate reading of portfolio flows to emerging market countries than conventional data sources, which tend to understate portfolio inflows.

Portfolio flows (both equity and debt) are arguably the most important capital flows component to track because they are typically the most volatile type of flow and the most susceptible to reversals, often driving movements in emerging market exchange rates and other asset prices.

IIF estimates indicate that, at an aggregate level, both equity and debt portfolio flows rose in February 2014.

 

 

  • Portfolio equity flows (listed equities) saw a net outflow of $8 billion in January, followed by a net inflow of $2 billion in February.
  • Portfolio debt inflows (sovereign and corporate bonds, in U.S. dollars and local currency) are estimated to have been at $15 billion and $18 billion in January and February, respectively.

IIF data also indicates that emerging market portfolio inflows in 2013 held up much better than conventional data sources suggest.

Foreign investors are estimated to have brought a total of $214 billion to emerging economies in 2013, of which 70 percent were inflows into the sovereign and corporate bond markets.

The tracker supplements IIF's current work examining capital flows to 30 major emerging market economies, which is published three times a year.

IIF will aim to release the tracker at the end of each month.

Further details about the tracker can be found at the following link: www.iif.com/emr/global/flows.

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The Institute of International Finance is the global association for the financial industry, with close to 500 members from 70 countries. Its mission is to support the financial industry in the prudent management of risks; to develop sound industry practices; and to advocate for regulatory, financial and economic policies that are in the broad interests of its members and foster global financial stability and sustainable economic growth. Within its membership IIF counts leading global banks, insurers, pension funds, asset managers and sovereign wealth funds, as well as leading law firms and consultancies. For more information visit www.iif.com.

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Dylan Riddle

Tel: +1 202.857.3626

Email: [email protected]

 

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