Mubasher: Capital outflows from developing countries amounted to $120 billion in the previous quarter, the largest since 2009, due to an exodus from China amid concern over the strength of the country’s economy, said JPMorgan.
In the first quarter, the emerging markets had $80 billion of inflows, the U.S. financial services provider.
It added that investors pulled $142 billion from China between April and June, which increased the total outflow from the world’s second-largest economy over the past five quarters to $520 billion. This wiped out all the inflows since 2011 when the country’s growth started to slow.
The assets of emerging markets suffered a sharp sell-off over the past two months, raising questions once again about credit creation and capital flows, JP Morgan said.
The yield increase in developed-nation debt in the second quarter was a good reminder of how important foreign-currency reserve managers remain in driving core bond markets.