By Rodrigo Campos
NEW YORK (Reuters) – Foreigners pulled money out of emerging market portfolios for a third consecutive month in October, with $17.2 billion in outflows from stocks and $13.8 billion poured into debt, mainly in local markets, a Washington-based banking trade group said on Wednesday.
The net $3.4 billion outflow in October followed a $13.7 billion outflow in the previous month and a $9.1 billion inflow in October 2022, according to estimates by the International Institute of Finance.
The $9.7 billion outflow in EM stocks excluding China last month was the largest for any month in more than a year, while a more than seven-fold increase in flows to ex-China debt to $20.5 billion marked a fourth consecutive month of inflows.
Chinese stocks saw a $7.5 billion outflow last month.
Chinese debt portfolios posted a $6.7 billion outflow, the ninth month of outflows this year.
Flows to EM ex-China debt are “shining a spot of hope for EM securities, mainly supported by stronger performance of local currency debt,” Jonathan Fortun, an IIF economist, said in a statement.
He said higher interest rates continue to weigh on some EM debt securities, but “a more robust outlook for the U.S.
economy along (with) faster-than-expected disinflation will benefit the overall picture in coming months.”
Regionally, Emerging Asia had the largest net outflows in October with a -$5.7 billion print, while Africa and the Middle East saw a $0.4 billion outflow.
Emerging Europe posted a $1.6 billion inflow and Latin America followed with $1.1 billion.
All geographical regions posted outflows from stock portfolios while debt posted inflows across all regions.
Year-to-date estimates through October show a net $81.4 billion outflow from China, while emerging markets ex-China have seen $186.3 billion in net non-resident portfolio inflows, the data showed.
(Reporting by Rodrigo Campos; Editing by Paul Simao)
