August 21, 2015 / 9:59 AM / 4 years ago

Equity outflows at 15-week high as investors seek bond safety: BAML

LONDON (Reuters) - Equity outflows hit a 15-week high of $8.3 billion in the past week, with fears of a China-driven global economic crisis pushing investors towards safe-haven money-market funds and Treasuries, Bank of America Merrill Lynch said on Friday.

Traders work on the floor of the New York Stock Exchange August 20, 2015. REUTERS/Brendan McDermid

An exodus from emerging markets also gathered steam, as investors pulled $6 billion out of EM equity funds - their seventh week in the red and the highest weekly tally in five weeks.

Emerging debt funds lost $2.5 billion, their biggest weekly loss since January 2014.

World stocks were heading for their worst week of the year on Friday and commodities took a fresh kicking after data showed Chinese manufacturing shrinking at the fastest pace since 2009.

That sent investors scurrying for the safety of bonds and gold, and the BAML data showed $2.5 billion flowing into funds dedicated to government bonds and Treasuries. This fund group has now seen seven straight weeks of inflow, their longest streak since November 2012.

Money market funds took in $8.2 billion, the longest inflow streak since November 2014 at three weeks, the data showed.

Precious metals absorbed $18 million for their second week of inflows, BAML said in its report, which also cited latest flow figures from data-provider EPFR Global.

European and Japanese equity funds held out with receipts of $3.7 billion but this was unlikely to endure in event of contagion from emerging markets, the bank said.

Emerging stocks have fallen 15 percent so far this year in dollar terms while many currencies are at multi-year lows against the dollar.

BAML said it was not yet time to venture back into beaten-down emerging assets. It added however that another $15 billion in redemptions in the next two weeks would trigger a “contrarian buy signal” for emerging stocks.

Reporting by Sujata Rao; editing by John Stonestreet

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