Non-resident investors pull cash out of emerging markets for three straight months
Foreign cash flowed out of emerging market portfolios for a third straight month in May, data from the Institute of International Finance (IIF) showed on Tuesday, matching a three-month outflow streak that ended in February 2016.
Non-resident portfolios posted a net outflow of US$4.9 billion last month, compared to outflows of US$4.5 billion in April and inflows of US$22.8 billion during May 2021.
The net outflows over the past three months total US$17.3 billion according to the IIF data.
China saw a net inflow of $4.7 billion, with US$2 billion finding a home in debt and US$2.7 billion going to equities, but data still shows net outflows year to date for the country.
Flows out of EM equities excluding China accounted for most of the net outflows in May.
“Mounting global recession risk is weighing on EM flows as anxiety builds over geopolitical events, tighter monetary conditions, realized inflation and fears that greater risks are building up,” Jonathan Fortun, economist at the IIF, said in a statement.
Emerging markets, excluding China, saw net outflows of US$9.6 billion, with US$6.1 billion exiting equities, according to the IIF.
