Emerging Market Funds See Largest Weekly Redemptions In 5 Months

(Sundiata Finance) – Stock funds suffer $1.6 billion of outflows in the week to August 16
Investors last week pulled money from emerging market (EM) stock funds for the first time in five months.
Emerging market stock funds suffered $1.6 billion of withdrawals in the week to August 16, the largest weekly outflow since last December, according to data provider EPFR.
Investors redeemed $79m from emerging market bond funds, the first weekly outflow since January.
The redemptions coincided with a bout of weakness in US equity and credit markets and a rally in haven Treasuries.
Investors have been jolted by sabre-rattling between the US and North Korea, as well as fault lines within the Trump administration that investors feared could jeopardise the president’s ability to push through his pro-business agenda.
The redemptions end what had been a 21-week streak of consecutive inflows to emerging market stock funds.
The flows have helped propel the MSCI emerging markets index up 23 per cent this year. Emerging market stock and bond funds remain one of the prime beneficiaries of central bank stimulus, as investors across the globe shift outside of their traditional asset classes.
Even with the recent withdrawals, emerging market stock and bond funds have amassed more than $90bn of fresh capital commitments this year, the EPFR data show.
In Nigeria total transactions at the nation’s bourse increased by 7.13 per cent from N205.61 billion recorded in May 2017 to N220.27 billion (about $0.72 billion) in June 2017.
Also, total transactions for the first half of the year increased by 49.78 per cent from N624.41 billion recorded in 2016 to N935.26 billion in 2017.
Foreign transactions also increased by 6.66 per cent from N95.19 billion to N101.53 billion within the same period.
Monthly foreign inflows outpaced outflows for the third consecutive month since June.
In comparison to the first half of 2016, total FPI transactions increased by 59.81 per cent from N269.22 billion to N430.23, whilst the total domestic transactions increased by 42.19 per cent from N505.03 billion to N355.19 billion. (BusinessDay)

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