Emerging market stocks and bonds saw foreign net inflows of about US$53.5 billion in January, building on the momentum from year-end 2020, data from the Institute of International Finance (IFF) showed on Monday (1 February 2021).
Non-resident portfolio inflows to emerging market equities hit US$9.4 billion last month and debt instruments attracted US$44.2 billion, according to the IIF.
It is the tenth consecutive month of net positive flows to emerging markets.
“We remain relatively constructive on our outlook, noting the potential of further inflows across the EM complex, given the high liquidity in the market, further developments on the vaccine front and increased appetite of investors,” the IIF said in its report.
The report highlighted, however, an “important outflow episode” focused in Asia during the last week of the month, which “reminds us of the lingering weaknesses across EM in a post-COVID-19 scenario.”
Non-Chinese emerging market stocks attracted some US$2.7 billion, the data showed, while Chinese equities had inflows of US$6.2 billion. On the debt side, flows to China totaled US$15.4 billion while the rest of EM funneled US$29.5 billion.
Last quarter emerging market inflows hit their highest since 2013, IIF data show.
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