All four major developing-nation equity fund groups posted outflows concurrently for the first time since June on concern the pace of the global economic recovery may not justify valuations, EPFR Global said.
Redemptions from global emerging markets, Asia, Latin America and Europe, the Middle East and Africa stock funds contributed to net outflows of $5.42bn for all equity vehicles in the week ended Wednesday, EPFR said in a statement received today. Bond funds took in a net $3.63bn during the week, it added.
“Worries about tighter credit conditions weighed heavily, with central banks talking about exit strategies from the ultra- easy policies of the past 12 months despite the fact key private institutions are still very publicly repairing their balance sheets,” EPFR said. The Cambridge, Massachusetts-based firm tracks funds with $10tn in assets.
Australia’s central bank raised interest rates this week for a second straight month while India and China both took steps last week to tighten lending requirements. The Reserve Bank said in Sydney yesterday that “a further gradual lessening of monetary stimulus is likely to be required over time.” Emerging-market stocks were among the worst performers in the week ended Wednesday, with developing-nation benchmark indexes posting the 10 biggest declines among 89 measures tracked by Bloomberg. Russia’s Micex index entered a correction during the period, while Vietnam’s tumbled 10%. |
