Press Release
July 29, 2015

Emerging market portfolio inflows weakened to $6.7 billion in July from $11.3 billion in June, according to the latest EM Portfolio Flows Tracker by the Institute of International Finance.

“EM portfolio flows have been subdued in recent weeks,” said Robin Koepke, an economist at the IIF and lead author of the report. “Investors seem to be in a ‘wait-and-see’ mode amidst concerns about Chinese equity market volatility and continued uncertainty regarding Fed liftoff and Greece.”

The IIF noted that EM equity inflows slowed to a year-to-date low of $1.6 billion in July, while debt flows remained subdued at $5.1 billion. EM Asia saw its weakest inflows of the year as concerns about China held back flows to other markets in the region (Chart 1).

Due to data limitations, portfolio flows to China are not included in the estimation of the Tracker, but a new proxy for foreign purchases of Chinese stocks published by the PBOC indicates significant retrenchment in June (Chart 2).

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The Institute of International Finance is the global association of 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 commercial and investment banks, asset managers, insurance companies, sovereign wealth funds, hedge funds, central banks and development banks. For more information visit www.iif.com.    

Press Release
July 28, 2015

Flows to emerging market funds have been particularly volatile amid concerns about Chinese equity markets, falling commodity prices and shifting perceptions on the timing of the first Fed rate hike, according to the IIF’s latest Portfolio Allocation Trends report. Portfolio Allocation Trends report was formerly known as the Trends in Investment Fund Portfolio Allocation.

“The share of emerging market assets in fund investors' portfolios has dropped to a post-crisis low," said Sonja Gibbs, director of capital markets at the IIF.  “This month's volatility in Chinese equity markets has actually masked the broader EM picture. Flows to Chinese onshore equity funds surged in early July, reflecting the impact of recent stimulus measures, which encouraged Chinese fund managers to use their own capital to buy shares. Stripping out China, EM mutual funds and ETFs have actually seen net outflows of $2.3 billion month to date." 

Press Release
July 8, 2015

Emerging market GDP growth picked up in Q2 after its multi-year lows in the previous two quarters, according to the latest update of the IIF’s EM Coincident Indicator.  The EMCI rose to 2.7 percent in June, up by 0.5pp relative to May and 0.7pp relative to March. This increased momentum is broad-based across regions, but most notably in EMEA and LATAM. 

“It is particularly encouraging that EM trade data continued to show signs of a turnaround this quarter, following a prolonged period of weakness since last autumn,” said Kristina Morkunaite, lead author of the report. “This turnaround suggests that stronger growth in advanced economies is now exerting more pull, raising hopes that EM weakness has run its course and activity will continue to gain momentum in 2015H2.

Press Release
June 25, 2015

Portfolio flows to emerging markets fell in June, reaching a year to date low of $4.2 billion, according to the latest EM Portfolio Flows Tracker by the Institute of International Finance.

“Portfolio flows to emerging markets have weakened further,” said Charles Collyns, chief economist at the IIF. “Emerging market investors seem to have become increasingly cautious as the Fed’s first interest rate hike since 2006 is approaching. Fears of Greece leaving the Euro Area have not helped either.”

The IIF reported that emerging market debt flows continued a five month streak of subdued momentum, while equity markets experienced the weakest monthly inflow of 2015. On a regional basis, inflows to EM Asia slowed in June while flows to Latin America were more resilient. In Emerging Europe, outflows continued for the fifth consecutive month.

Press Release
June 23, 2015

MEETING OF THE PARIS CLUB WITH REPRESENTATIVES OF NON PARIS CLUB BILATERAL CREDITORS AND REPRESENTATIVES OF THE PRIVATE SECTOR

For the 15th consecutive year, the Paris Club and the Institute of International Finance jointly organized a meeting between Paris Club creditors, Paris Club ad hoc participants and private creditors, and representatives from the International Monetary Fund and the World Bank.

Press Release
June 16, 2015

The Institute of International Finance today announced that Clay Berry will join as Chief Economist for Europe effective August 17.

Berry currently serves as the U.S. Department of the Treasury’s Financial Attaché in Moscow. Berry represents the Treasury Department in Russia and the Commonwealth of Independent States (CIS), advancing the Treasury’s interests in the region.

“Developments in Europe, especially Emerging Europe, will be a dominant theme in the global economy for the foreseeable future,” said Tim Adams, president and CEO of the IIF. “Clay’s experience and contacts throughout the region will be a vital asset to the IIF and its members.”

Press Release
June 10, 2015

Emerging market GDP growth likely accelerated in 2015Q2 after having fallen to a six-year low in Q1 according to the latest update of the IIF's EM Coincident Indicator. The EMCI showed an increase to 2.2 percent in May, up from 1.6 percent in April.

“We’ve begun to see a more positive trend in emerging market growth since the steep decline observed since last autumn,” said Kristina Morkunaite, lead author of the report. “This underpins hope that EM growth will pick up in Q2, having reached a six-year low in the first quarter of 2015.”

Press Release
June 9, 2015

The Institute of International Finance today announced the opening of a new European Representative Office in London.

“Europe continues to play a large role in the global financial system and within our membership,” said Tim Adams, president and CEO of the IIF. “Opening this office will allow us to better serve our members in the region and more closely engage with key global regulatory bodies.”

Press Release
June 3, 2015

The European Central Bank Governing Council reviewed a brightening landscape at today’s monetary policy meeting as financial conditions remain favorable, real economy indicators are solid and inflation has picked up, according to the IIF’s updated “Draghi’s Dashboard”.

“Our inflation sub-index is finally climbing out of ‘red’ territory, as headline inflation seems to have bottomed out and is now on the right track – a signal that was reinforced by Tuesday’s report of an acceleration in Euro Area core inflation in May,” said Sonja Gibbs, Director of Capital Markets at the IIF. “The rise in our sub-index also reflects a welcome increase in long-term inflation expectations.”

Press Release
June 2, 2015

Against a backdrop of bank deleveraging, years of ultra-low rates, and government efforts to develop corporate bond markets, there has been a notable shift in the funding mix of the global corporate sector towards bond financing, according to the latest Capital Markets Monitor from the Institute of International Finance.

“One of the key vulnerabilities exacerbating the financial crisis was high levels of leverage in many banking systems,” said Hung Tran, executive managing director at the IIF. “Consequently, an important component of global financial regulatory reform has been to reduce leverage in banks, through measures such as capital requirements and leverage ratios. However, there has been growing concern over the past few years that leverage has been migrating from banks to non-banks including the corporate and household sectors, both in mature and emerging economies.”

Media Contacts

Andrew DeSouza
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E-mail: adesouza@iif.com

Emily Klopf
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E-mail: eklopf@iif.com