By Rodrigo Campos
(Reuters) -Foreign investors added a net $19.2 billion to their emerging market portfolio holdings in November, with selling of stocks more than offset by a continuing flow of cash into EM debt, data from a trade group showed on Friday.
Stock portfolios saw an $11.1 billion outflow while bonds attracted $30.4 billion last month, data from the Institute of International finance showed.
The November net inflow of $19.2 billion compares with a $0.3 billion net outflow in October and an $38 billion inflow in November 2023.
Chinese equities shed $5.8 billion while the country’s bonds saw an outflow of $7.5 billion, underscoring investor concerns over geopolitical tensions including an opening of more fronts in the expected trade war with the incoming U.S. administration.
Markets reacted to President-elect Donald Trump’s U.S. election win and the subsequent rally in the dollar, which has historically weighed on emerging market assets.
“This sustained pessimism surrounding Chinese equities is rooted in a confluence of factors, including regulatory concerns, slowing economic growth, and persistent geopolitical tensions,” IIF economist Jonathan Fortun said in a statement.
He said the resilience of EM debt markets outside China was underpinned by the ongoing quest for yield and the relative stability of fixed-income assets compared to stocks.
All regions saw net inflows in November with Latin America leading the pack at $6.5 billion, while EM Europe attracted $4.8 billion, Asia $4.6 billion, and Africa and the Middle East $3.4 billion.
(Reporting by Rodrigo Campos; Editing by Chizu Nomiyama and Alexander Smith)
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