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Emerging markets bonds, stocks lose $83.3 bln in March, suffer "sudden stop" -IIF

Credit: REUTERS/RODRIGO GARRIDO

Emerging markets have suffered a "sudden stop" in capital flows in March with portfolio investors pulling a record $83.3 billion from stocks and bonds due to the combination of uncertainty over the coronavirus spread and large oil price and financial shocks.

LONDON, April 1 (Reuters) - Emerging markets have suffered a "sudden stop" in capital flows in March with portfolio investors pulling a record $83.3 billion from stocks and bonds due to the combination of uncertainty over the coronavirus spread and large oil price and financial shocks.

The Institute of International Finance (IIF) found in its flows data that outflows from emerging equity funds had reached $52.4 billion in March. Outflows from China stocks hit $12.3 billion while the remaining equity universe suffered a loss of $40.1 billion.

Emerging market debt bled $31.0 billion, the second-largest monthly outflow on record after October 2008, the IIF found.

"While the impact of COVID-19 was first noticeable in January and then contained to China, a wider spread of the pandemic in recent weeks rattled markets creating a shock to EM more severe than the GFC (great financial crisis) as far as capital flows are concerned," Jonathan Fortun, economist at the IIF said on Wednesday.

(Reporting by Karin Strohecker; editing by Carolyn Cohn)

((karin.strohecker@thomsonreuters.com; +442075427262; Reuters Messaging: karin.strohecker.reuters.com@reuters.net))

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