The fourth quarter of 2016, emerging markets how miserable? In November December, the U.S. presidential election pummeled the Federal Reserve to raise interest rates, emerging markets suffered a strong capital outflow. According to the capital flows monitoring agency EPFR data show that all emerging market equity funds in the fourth quarter of last year suffered a $7 billion 945 million fund redemption. In terms of debt, Societe Generale Bank report shows that emerging markets in addition to Chinese outside the capital outflow of $25 billion in fourth quarter of last year.
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From the historical data, the fourth quarter of 2016, when earnings in developed market can provide are generally low, many investors in emerging markets to chase yield, so the emerging market has attracted a lot of capital inflows, but the situation was reversed in the fourth quarter. According to the Institute of International Finance (hereinafter referred to as IIF) report released in January 3rd showed that poor performance in the fourth quarter, the annual investment in 2016 emerging market securities to attract foreign investment of only $28 billion, the weakest since 2008 for a year, less than the 2010-2014 average of 10%. from asset classes, 2016, emerging market stocks the performance is better than that of bonds, stocks and bonds net inflows of $61 billion 400 million, a net outflow of $33 billion 800 million.
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The IIF report analysis pointed out that the reason why emerging market capital outflows intensified at the end of last year, including the U.S. presidential election, then bring inflation expectations and the Fed’s more hawkish stance. In addition, the market for the RMB exchange rate uncertainty is heating up again, also worried about Trump or the government will have a negative impact on global trade. The above factors, the emerging market in the fourth quarter of 2016 once again under pressure.
Correlation of emerging market trends and decrease the Fed rate hike
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