The Withdrawal Of Funds Leads To The End Of The Good Life In Emerging Markets?

Last week, investors withdrew funds from the US ETF, which invested in emerging markets, for the first time since the beginning of October, ending the longest net inflow of funds since May.

Worried about China,

Emerging market economies, such as emerging markets, are investing in emerging market ETF.

A large number of evacuations reached US $19 billion in the first 9 months of this year.

Geoff Dennis, executive director of UBS's emerging market strategy, commented, "nobody seems to want to stay in the emerging market now", while Ursula Marchioni, chief strategist of the fund, believes that it is too early to say that emerging markets have bottomed out.

According to Bloomberg data

The EFT investment in developing countries and specific target countries has a total redemption of $91 million 300 thousand.

In the previous week, the ETF had inflow of $1 billion 100 million and inflows of $2 billion 580 million in the past three weeks.

In emerging markets, the largest change in EFT funds is Mexico.

The ETF has shrunk by $87 million 700 thousand in Mexico, where investors withdrew $82 million 100 thousand from equity funds and redeemed $5 million 700 thousand from bond funds.

A week earlier, the ETF inflow amounted to US $37 million 300 thousand.

Turkey is second only to Mexico.

ETF investors redeem $31 million 200 thousand, after a week's inflow of $13 million 900 thousand.

While funds fled from emerging markets, Canada, as a developed country, could not hold the hearts of investors.

The main reason for the capital flight is the collapse of crude oil prices. The largest proportion of Canada's exports of crude oil declined sharply, which was only half the peak in 2014, forcing Canada's oil sands projects to drag on, and Canada became the world's most expensive crude oil producer.

Alvise Marino, US exchange strategist at Credit Suisse Group, said:

It is Canadian investors who have withdrawn their capital overseas. Over the past ten years, Canada's policies have favoured the investment in the energy sector, but the decline in oil prices has made these investments unprofitable.

Although the price of Brent crude has been stabilized in recent times, the outflow of funds is worse.

Where do these funds flow?

Canada Company has turned its investment to overseas.

Royal Bank of Canada expects to buy Losangeles's city state bank for $5 billion 400 million, the largest acquisition in its history.

According to Credit Suisse data, Canada completed a net outflow of $73 billion through mergers and acquisitions this year, whether completed or announced.

At the same time, individual investors also follow suit to invest in overseas markets.

Wall Street has previously reported that Canada's two consecutive quarters of economic contraction is the worst recession since 2009.

Although the Bank of Canada raised its GDP expectations in the three quarter of October in October, the growth of potential output will remain at a low level due to the decline in oil and commodity prices and the suppression of business investment and exports in the resource sector.

Canada's RBC manufacturing PMI index fell to 48 in October, a record low. It has been below 50 of the three consecutive month, indicating that the Canadian manufacturing sector is shrinking.