Four major emerging stock funds post first outflows since June
Redemptions from Asia, Latin America & Europe, the Middle East and Africa stock funds contributed to net outflows of $5.42 bn for all equity vehicles in the week ended Nov 4

Shiyin Chen. Singapore
All four major developing-nation equity fund groups posted outflows concurrently for the first time since June on concern the pace of the global economic recovery may not justify valuations, EPFR Global said.
Redemptions from global emerging markets, Asia, Latin America and Europe, the Middle East and Africa stock funds contributed to net outflows of $5.42 billion for all equity vehicles in the week ended November 4, EPFR said in a statement. Bond funds took in a net $3.63 billion during the week, it added.
"Worries about tighter credit conditions weighed heavily, with central banks talking about exit strategies from the ultra-easy policies of the past 12 months despite the fact key private institutions are still very publicly repairing their balance sheets," EPFR said. The Cambridge, Massachusetts-based firm tracks funds with $10 trillion in assets.
Australia's central bank raised interest rates this week for a second straight month while India and China both took steps last week to tighten lending requirements. "A further gradual lessening of monetary stimulus is likely to be required over time," the Reserve Bank said in Sydney.
Emerging-market stocks were among the worst performers in the week ended November 4, with developing-nation benchmark indexes posting the 10 biggest declines among 89 measures tracked by Bloomberg. Russia's Micex index entered a correction during the period, while Vietnam's VN Index tumbled 10%.
The MSCI Emerging Markets Index rose for a third day, adding 1.1% to 940.26 as of 5:10 pm in Singapore on Thursday, while the MSCI World Index of developed nations increased 0.2% to 1,130.85.
US consumer spending fell 0.5% in September, while the Reuters/University of Michigan final index of consumer sentiment decreased in October, raising concern that the US economy, which grew in the third quarter for the first time in more than a year, may falter.
"We will likely see an early-cycle peak of the equity market going into the end of the year because we're now seeing the peaking of the global industry production growth momentum," Fan Cheuk Wan, head of Asia-Pacific research at Credit Suisse Private Banking, said in an interview with Bloomberg Television. "We would regard this as a healthy short-term correction in the equity market."
Developing nation stock funds lost about $1.3 billion during the week, snapping an 8-week winning streak, Morgan Stanley analysts led by Jonathan Garner said in a note dated on Thursday, citing EPFR data.
Global emerging-market equity funds lost $539 million in the week, while those investing in Asia developing nations, Latin America and Europe, the Middle East and Africa also saw outflows, EPFR said. Redemptions from China totalled $270 million while India lost $82 million, the highest so far this year.
Among developed nations, US equity funds posted outflows for the fifth time in six weeks, while Europe stock funds recorded losses of $535 million, their worst week since the period ended July 8, EPFR said. Japan funds also saw outflows for the seventh straight week, taking net losses this year to more than $5 billion.
Bloomberg

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