WASHINGTON, July 28 Portfolio investment into
emerging markets reached a two-year high in July at $44 billion,
the Institute of International Finance said on Monday.
That was up from a $37 billion inflow in June, the global
financial industry group said in the monthly report.
Equity investment flows accounted for $16 billion, up from
$7 billion in June, the IIF reported, while bond markets took in
$28 billion, down slightly from last month's $29 billion.
The bond investment flows were supported by the volume of
primary issuance from emerging borrowers, who raised $11 billion
IIF chief economist Charles Collyns said $195 billion has
flowed into emerging markets so far this year, only $14 billion
short of the amount seen in 2013, when investors were spooked by
plans by the U.S. Federal Reserve to taper the pace of its
stimulative bond buying.
"Emerging markets have rebounded strongly from last year's
taper tantrum and are on track for record inflows this year,
propelled by avid risk appetite and little concern about the
prospect of rising global interest rates," Collyns said.
"Investors seem confident - perhaps overconfident - that Fed
exit will unfold very gradually," he said.
The U.S. central bank is poised to shutter its bond-buying
program this fall and economists expect it will begin to push
benchmark interest rates up from their current level near zero
in the second quarter of next year.
(Reporting by Moriah Costa; editing by Gunna Dickson)