The yen is at a four-year low against the dollar, having broken through the key Y100 level. But those hoping that a falling yen would spark a rush of Japanese money back into emerging markets assets may have to wait.
The move by the Bank of Japan to unleash an unprecedented wave of aggressive monetary easing should in theory boost appetite for EM assets. Lower domestic yields and higher inflation, the argument goes, would push Japanese investors into EM.
But five weeks on, not many Japanese yen appear to have arrived on the EM shores. Continue reading »
Money flowing into Africa-dedicated equity funds in the final month of last year reached $878.4m, the biggest monthly inflow in just over two years and four times the amount in the previous month, according to data provider EPFR, write Alexandra Stevenson and Andrew Bowman. Continue reading »
The flying start to the year continues among emerging market bond investors, with flows to dedicated EM bond funds in the week to Wednesday matching the heady heights of the previous week.
And if the headline figure is high, investors’ appetite for risk is apparently higher still. Most of the money went to local-currency funds, with hard-currency funds taking a back seat. Continue reading »
More evidence of the ebullience engulfing emerging market assets since late 2012: on Tuesday, Ashmore Group, a big EM asset manager, said its assets under management had increased by $3bn to $71bn as of December 31, made up of $2bn accounted for by “positive investment performance” and $1bn of net inflows.
Ashmore did best out of EM debt, especially the local currency variety. But the EM rally has extended to equities, too. The Shanghai Composite was up 0.6 per cent on Tuesday, for example, bringing its rally since December 4 to 18.9 per cent. In Shenzhen, gains since December 4 have reached 27.4 per cent. Continue reading »
Signs of nervousness in the world of EM-dedicated funds, with flows to bond funds and equities funds both slowing down in the week to Wednesday, according to data supplied to banks by EPFR, the Boston-based fund watcher. Continue reading »
A fascinating week for followers of fund flows, with both bonds and equities showing signs of a renewed taste for EM risk against the backdrop of the US presidential election. Continue reading »
Portfolio investors’ 2012 advance into emerging markets goes on. Data from EPFR, the funds research company, provided to banks indicate that in the seven days to Wednesday, EM bond funds recorded an overall inflow for the 21st week in succession. EM equities posted an inflow for the eighth week in a row.
With the developed world’s central banks pouring easy money into the market, the global financial tide shows little sign of turning. Continue reading »
Readers of beyondbrics know that emerging markets bonds are hot properties at the moment. Investors are flocking to them for their attractive yields and EM companies and governments, emboldened by the demand, have been happy to oblige, issuing a record $360bn in hard-currency bonds so far this year.
But every bond issued adds to the money that must be repaid somewhere down the line. For David Spegel, head of emerging markets strategy at ING, 2014 could be a crunch year for EM bond refinancing – particularly of speculative-grade bonds. Continue reading »
For a world supposedly in the grip of crisis and uncertainty, it has been a remarkable run for EM dedicated funds. In the week to October 17, EM bond funds had their 19th straight week of inflows according to EPFR, the fund flow monitor – indeed, of the past 40 weeks, only three saw outflows, bunched together in late May and early June when the Greek crisis was at its scariest.
Equities, as ever, have been more volatile but the year-to-date tally is also strongly positive. In the sample monitored by EPFR – about a sixth of the total, analysts reckon – EM dedicated equity funds have taken in $25.2bn and bond funds, $29.5bn.
Koon Chow at Barclays reckons the flows will keep coming – for a while. Here’s why. Continue reading »
No end in sight to the money flowing into emerging market funds, bond funds in particular.
Boosted by QE3 and bouyed by hopes of some stability, if not calm, returning to markets, fund managers have reported net inflows into both bonds and equities for the fifth week in a row. Continue reading »
Another solid week of flows to emerging market funds, with bond flows looking respectable for the fourth straight week despite a gradual slowdown, and more volatile equity flows still looking buoyant.
The QE rally seems to be intact, for now. Continue reading »
The promise of floods of money is still having an effect on fund flows, as shown by data for the week to Wednesday from EPFR, the fund monitor. But the data also reflect the fact that the northern hemisphere summer is over and the eurozone crisis and other associated woes are back on investors’ minds.
It was the third consecutive week of solid flows into EM bond funds, though the size of flows has fallen for the past two weeks. On the equities side, though, things were decidedly mixed. Continue reading »
Flows of money out of developed markets and into emerging ones have often been explained as a “search for yield”. As DM yields have fallen, the argument goes, investors looking for big returns have had to take more risk and put their money into EM assets.
But this year, things have changed. Rather than buying risky equities or almost as risky local currency bonds, EM investors have put their money into relatively safe, hard currency bonds. Why? Pablo Goldberg of HSBC argues in a report on Tuesday that the search for yield is giving way to a search for safety. Continue reading »
Say what you like about the downsides of QE, it sure gets the funds flowing. The latest figures from EPFR, the Boston-based fund watcher, suggest it gets the animal spirits flowing, too. Not only did investors take the promise of fresh liquidity as a signal to fill their boots. They also threw caution to the winds, moving heavily into equities and, on the bond side, putting more of their money into riskier local-currency bond funds than they have done for months. Continue reading »
Last week, we noted that Mario Draghi’s big bazooka had come too late to influence the latest data on fund flows from EPFR, compiled each week to Wednesday. The blast is pretty evident in this week’s numbers – and they were compiled before Helicopter Ben followed Super Mario with the promise of a third round of QE.
The prospect of more liquidity from the US Federal Reserve was already buoying up sentiment before Thursday’s announcement. But Ben Bernanke’s apparent commitment to spend as much as it takes – following a similar pledge from the European Central Bank – was not fully priced in. For fund flows, the odds are that this will be more than a one-week rally. The question is, how much more? Continue reading »