FILE PHOTO: Visitors stand next to an electronic stock board at the Indonesia Stock Exchange in Jakarta, Indonesia, November 8, 2016. REUTERS/Iqro Rinaldi/File Photo
KUALA LUMPUR: Portfolio inflows in emerging markets in Asia are expected to rebound after falling sharply to well below benchmark level, said Frank Warnock, University of Virginia’s professor of business administration.
He said in Indonesia, equity inflows were well below benchmark level while bond inflows were above it.
“One might expect Indonesian equity inflows to increase and bond inflows to slow,” he said in his presentation on Benchmarking Portfolio Flows at BNM-IMF Summer Conference on Wednesday, organised by Bank Negara Malaysia (BNM) in collaboration with the International Monetary Fund (IMF).
In India, he said, both equity and bond inflows had fallen below benchmark levels.
However, both were expected to rebound to benchmark levels, he said.
Meanwhile, Federal Reserve Bank of New York’s senior vice-president and monetary policy advisor in the research and statistics group, Paolo Presenti, said the slowdown in Asian emerging markets portfolio inflows in 2015 was unlikely to be sustained as inflows were well below benchmark.
“Global slowdown in inflows should be considered transitory in most advanced economies,” he said.
IMF Research Department assistant director, Eugenio M. Cerutti, said the banking industry was moving towards regionalisation, with increased lending within region.
“This growth is more regionally focused, as Asian banks are lending more within the Asian region, while Latin American banks are lending within the Latin American region,” he said in a briefing on The Global Banking Network in the aftermath of the Crisis during the conference.
Cerutti said the banking industry was leaning towards regionalisation more than before the global financial crisis. - Bernama
