The inflow of funds to emerging markets fell sharply on expectations of the speech of the head of the Federal reserve Janet Yellen. Investors fear that the fed may tighten monetary policy that will put pressure on markets. According to EPFR Global for the week from 18 to 24 August, net flows to emerging market funds have fallen sharply — from $5.2 billion in the previous week to $37.2 million.
Investors prefer non-funds global emerging markets, wrote in his review analyst at Sberbank CIB Cole Axon. From 17 to 24 August, investors have invested in them $492,5 million (a net inflow).
According to the Emerging Portfolio Fund Research, the total net cash outflow from funds investing in Russian shares, from 18 to 24 August amounted to $24.5 million against inflow of $167 million the previous week. Global funds oriented to the Russian market, lost $36.9 million, more than twice the outflow in the previous week ($16.7 million).
In early August, EPFR Global recorded a net inflow of funds focused on Russia, it made $65 million And, as announced by Sberbank CIB, black was both passive and active funds — the first attracted about $33,4 million and the second $31.4 million
Since the beginning of the year loss of funds working with Russian assets amounted to $614 million, while global invested $888 million, indicates Cole Axon. This, says the analyst, is due to the net inflow of investments in Russian assets since the beginning of the year, which totaled $127 million.
According to the latest data, active funds withdrew from Russia $30.7 million, passive funds had invested $6.2 million
On Friday the scheduled speech by fed chair Janet Yellen, which is associated with many expectations, and to the events the markets will be low, indicates analyst “Discovery Broker” Andrei Kochetkov. According to senior Manager for research and analysis of industries and capital markets PSB Ilya Frolov, markets puts pressure falling oil price and news of a sudden check Armed forces of Russia.
Uncertainty in the expectation of Yellen’s speech affect the mood of market participants. The MICEX index with the opening grows moderately by 0.05% to 1986,95 points. The ruble is weakening against other world currencies. According to 11:50 Moscow time the dollar on the Moscow exchange was worth 64,81 RUB, rising 13 cents, the Euro rose 17 cents to 73 and 17 RUB.
The speech of the fed to support the Russian currency, an analyst at Sberbank CIB Tom Levinson predicts. “Our analysis shows that the speech of Janet Yellen ultimately have a positive impact on the ruble. Comparing the reaction of a number of currencies in the speech of the head of the Federal reserve, we saw that this year in six cases, the ruble rose an average of more than 1%,” he writes in his review. Thus positive dynamics after all the speeches of the Chairman of the fed, analyst, showed only the Russian ruble and South African Rand. It is not excluded that the Russian currency will rise to 64,25-to 64.5 rubles per dollar, he said.