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.
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 the November election of Donald Trump as U.S. president 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.