Entries for 'Capital Flows'
August 3, 2022
Portfolio flows to EM stood at -$9.8 bn in July.
Equity and debt flows were -$1.0 bn and -$8.8 bn.
Chinese equities posted $3.5 bn in outflows.
November 17, 2021
Non-resident portfolio flows to local markets have recovered Covid-related losses. Looking at country allocations, important shifts have taken place in recent years. Foreign holdings are significantly lower in Brazil, Mexico, Poland, and Turkey, and higher in Egypt, Indonesia, Russia, and South Africa, due to policies and FX. Importantly, pressure on EM to defend their currencies has declined in recent years. However, EM are now more directly exposed via foreign investment in local bonds. And the synchronization of global inflation makes them vulnerable to DM inflation.
November 10, 2021
Non-resident flows to EM local markets x/ China have now recovered from the Covid shock. Dynamics differ among countries, however, with some still seeing large cumulative outflows. Foreign investors currently hold around $600 bn in local government debt outside of China. Inflows have been relatively weak in recent months and cost of funding has risen across EM. The opening of China’s local market has had a large impact with $250 bn in inflows since ‘18. The country now accounts for close to 40% of total foreign investor positions in local EM debt.
November 1, 2021
Frontier Sub-Saharan Africa is emerging from the pandemic shock, but growth is comparably weak. We project a strong pickup in non-resident capital flows to $56.1 bn in 2021 from last year’s $23.6 bn. The recovery in FDI is robust, but persistently higher investment will be needed over the medium term. Financial conditions remain favorable, and strong Eurobond issuance drives the rise in portfolio flows. IMF emergency financing in 2020 and this year’s general SDR allocation have provided critical support. Assistance from IFIs will continue going forward, albeit at lower levels and with stronger conditionality. In addition, external financing needs are set to rise as substantial Eurobond amortization looms large. Thus, the region will need to attract higher and less volatile inflows to reduce external vulnerabilities. External financing risks are highest in Ghana, where market concerns over the country’s dent are rising. Angola and Nigeria are under less pressure, while IMF programs should help Kenya, Senegal, and Zambia.
October 13, 2021
We project non-resident flows of $128 bn to CEEMEA countries in 2021. Higher FDI and the IMF’s SDR allocation are the most important drivers. Excluding one-offs, however, flows will remain below pre-pandemic levels. G3 tightening will likely reduce investors’ appetite for EM assets in 21Q4. But further rate hikes in CEEMEA should improve portfolio flows in 2022. Non-resident flows to the region are estimated to reach $98 bn next year.
January 5, 2021
Portfolio flows to EM stood at $45.9 bn in December.
Equity and debt inflows were $29.3 bn and $16.6 bn.
China equity flows posted $13.2 bn in inf...
October 21, 2020
We expect a stronger recovery in capital flows to Asia relative to other EMs in 2021. FDI remains an important driver, with India and Indonesia as the largest recipients. Relatively robust inflows and c/a adjustments in ‘20 allow for reserve accumulation. A reemergence of COVID-19 and geopolitical factors are the key risks to the outlook.
October 14, 2020
We expect a slow and uneven recovery in non-resident capital flows globally. CEEMEA should fare somewhat better with a broad pickup in ‘20H2 and ‘21. The recovery will likely be driven by stronger FDI and portfolio capital flows. A possible COVID-19 resurgence and geopolitical risks weigh on the outlook. If sentiment worsens, Turkey, South Africa, and Ukraine will be most exposed.
June 3, 2020
Non-resident flows to emerging and frontier markets will contract sharply in 2020. Remittances have become an important, countercyclical, source of inflows for EM. In 2020, however, they will likely be much lower due to the global nature of shocks. High-frequency data show that the deceleration had already begun in the 1st quarter. Central America and the Caribbean, the Philippines, and Egypt are most exposed.
April 8, 2020
The COVID-19 shock has led to a pronounced sudden stop in EM. Out short-term portfolio tracker shows record outflows in 2020Q1. We expect a modest recovery in capital flows in the 2nd half of 2020. Nevertheless, capital flows to EM will be much weaker than in 2019. Given uneven EM policy space, multilateral support will be needed.
October 16, 2019
We expect a pickup in portfolio flows to emerging markets in 2020. 2019 saw a healthy recovery so far, despite slowing global growth. Central banks’ pivot towards monetary easing supports debt flows. Local markets appear to have attracted large inflows in 2019H1. This was true for established EMs as well as some frontier markets.
October 1, 2018
Portfolio inflows to EMs increased slightly to $7.9 billion in September, due mostly to a rebound in bond inflows to $5.6 billion-offsetting the slowd
September 27, 2018
Profit repatriation slows-a potential trigger to rebalance away from U.S. equities' Sharp divergence in shadow policy rates Wide valuation gap between
September 17, 2018
Against the backdrop of rising rates, a stronger USD and more volatile capital flows, Bahrain, Pakistan, Zambia, Ghana and Tunisia are currently among
September 4, 2018
Equities were more resilient with over $7 billion in inflows-of which China was $5.8 billion; in contrast, debt saw
August 22, 2018
The Survey is addressed to Senior Loan Officers, Chief Credit Of
August 2, 2018
With this edition of the IIF Capital Flows Tracker, we introduce a new version of the EM Portfolio Flows Tracker. Our " Tracker 4.0 " provides a more
July 2, 2018
Non-resident portfolio outflows from emerging markets rose to $8 billion in June, following $6.3 billion of outflows in May However, our broader measu
June 4, 2018
Non-resident portfolio outflows from emerging markets accelerated to $12.3 billion in May from $0.3 billion in April EM debt and equity markets saw ev
May 3, 2018
Stronger dollar has spelled trouble for EM carry trades and local currency bonds Recent EM outflows now more on the debt side, in contrast to equity o