Foreign flows to emerging markets drying up

In Malaysia, foreign buying of local equities had also slowed significantly, falling to RM200mil last month from RM1.6bil a month earlier, according to data compiled by Maybank Investment Bank Research.

FOREIGN flows into emerging market (EM) stocks and bonds excluding China have slowed sharply, as concerns grow over the United States Federal Reserve’s (Fed) impending tightening cycle and the emergence of the Omicron coronavirus variant.

According to the International Institute of Finance (IIF), EM investors have turned more selective and risk sensitive given the risks involved.