Global funds focused on assets of Russian companies, completed in 2016 with more than fivefold increase in investment and in the first week of 2017 fixed them to be released. Moreover, of the 22 global emerging markets the volume of investments attracted during the first week of the new year increased apart from Russia, only two. These data are provided by the us-based Emerging Portfolio Fund Research (EPFR) Global, which tracks and publishes weekly statistics on the movement and distribution of funds.
Russia in the black
According to EPFR, which leads Bloomberg, investors in 2016, has invested in funds that invest in shares of Russian companies, 5.5 times more than in 2015 — $1.14 billion versus $208 million Is the highest annual result since 2010 ($3.3 billion). Weekly inflows and outflows of investments in Russian assets in 2016 has varied, but from July to December saw a marked increase. Over the past reporting week ended January 4, the inflow amounted to $95 million.
As UBS says in his review () of 22 global emerging markets, EPFR which tracks, only three — Russia, Brazil and Thailand for a week increased the volume of assets under management (Russia and Brazil — 0.1% Thailand — 0.2%).
Foreign investors expect the recovery in economic growth and consumer demand in Russia, after two years of recession. As noted by Bloomberg, investors now revise the forecasts for 2017 given the rate cut expectations, rising raw material prices and a possible gradual lifting of U.S. sanctions and the European Union. At the end of December the investment banks called Russia the most attractive emerging market in 2017, expecting that of all emerging markets, Russia will benefit the most from the election of the President of the United States Republican Donald trump. According to EPFR, six weeks after his victory, investors have invested in Russian funds almost $1.3 billion, offsetting the outflow for the previous two and a half years. A consequence of positive market expectations from his election victory was also a fall in the value of the ten-year credit default swaps (risk indicators for investment) at the end of December to a minimum over the past two years mark.
The optimistic and the situation in the commodities market, notes the analyst of “Finam” Bogdan Zvarich. “There were concerns that the member countries of OPEC will not adhere to the agreements about the freezing of oil production, but while they act in the framework of the agreement. In addition, we are not seeing production growth in the United States. Since June of last year, while drilling activity is a harbinger of production growth. While production growth is not happening is a positive thing,” he explains.
Asia in the red
Data from EPFR presented in the overview UBS (has y), it follows that funds that invest in assets in 22 global emerging markets (GEM), in 2016 have recorded a capital outflow of $2.6 billion, Such a result was formed mainly at the expense of funds investing in assets of companies in Asia (excluding Japan): in 2016, they suffered the greatest losses — $24 billion.
The outflow of funds investing in assets 22 global emerging markets, was observed in early 2017: in the week ended 4 January, compared with $537 million As at the end of 2016, the most — $458 million in lost funds that invest in assets of companies in Asia (excluding Japan), mainly China and Taiwan, says UBS.
At the same time, funds focused on assets from Europe, the Middle East and Africa, in the first week of 2017 have recorded inflows of $89 million, mainly due to Russia. The inflow to these funds is observed for the eighth consecutive week and became the longest since January 2011 (when the duration of the inflow was 20 weeks, during this time, in the assets of the companies in the region have invested more than $5 billion). Funds focused on Latin America received inflows of $47 million.