Emerging market stock and bond inflows slow in August-IIF

miércoles 27 de agosto de 2014 14:27 GYT

WASHINGTON Aug 27 (Reuters) - Emerging markets took in only $9 billion in stock and bond investments in August, below the average for the past three months and lackluster even compared to prior Augusts, a global financial industry group said on Wednesday.

Inflows into debt markets were particularly low, and bond issuance fell by half compared to the same month last year, the Institute of International Finance, or IIF, said in its monthly report on portfolio investments into emerging markets.

"While the usual seasonal lull surely contributed to the weakness, the sharp slowdown in portfolio flows in August could also mark the beginning of a period of greater caution among global investors towards (emerging markets)," Charles Collyns, the IIF's chief economist, said in a statement.

Portfolio investment into emerging markets hit a two-year high last month at $44 billion, and totaled $36 billion in June, IIF data showed.

The IIF said much of August's decline was driven by outflows from emerging Europe and Africa, though inflows to Asia and Latin America also fell.

The slowdown in investment flows comes even as emerging market stocks touched new three-year highs on Wednesday, supported by the prospect of further monetary stimulus in the euro zone, while Moscow-listed shares rose after tentative signs of diplomatic progress over the Ukraine crisis.

Expectations are growing that the European Central Bank will further ease monetary policy to counter sluggish growth and low inflation. Additional easing would boost demand for riskier emerging stocks, which are up some 9 percent this year. (Reporting by Anna Yukhananov; Editing by Chizu Nomiyama)