Investors back to emerging markets: Report
April 9, 2014, 11:57 am

An investor cools off with a fan at a private securities company in Shanghai, China [AP]

Investors have started moving back to emerging market equities during the final days of March, said EPFR.

The final days of March saw equity funds focused on emerging markets make a “modest but perceptible start on reversing the more than $40 billion worth of outflows that they chalked up during the first three months of 2014”, said the report.

Emerging-market stocks hit a four-month high on Wednesday with the MSCI emerging index rising 0.5 per cent to levels not seen since early December.

While China shares ended at a seven-week high, the South African rand held near this year’s peak at 10.40 per dollar. The Indian rupee rose 0.2 per cent to 60.0050 per dollar.

The Russian rouble has also steadied at 35.74 per dollar, mirroring the ebbing of tensions with Ukraine. Brazil’s real rose to a five-month high on Wednesday gaining for a third straight day, climbing 0.8 per cent to 2.2016 per US dollar.

An IMF report said yesterday developing Asian economies are forecast to grow 6.7 per cent in 2014.

Investors had pulled out over $41 billion from equity funds focused on emerging markets, including BRICS, in the first three months of 2014, after the US Federal Reserve began winding down its quantitative-easing programme, said an earlier EPFR report.

“Emerging market equity funds endured a rough start to 2014 as the winding down of the Federal Reserve’s quantitative easing programme, a crowded electoral calendar, mixed economic data from China and events in Ukraine gave both institutional and retail investors plenty of good reasons to keep a distance,” the report added.

 TBP and Agencies