Investors have turned more constructive on emerging markets, the Institute of International Finance (IIF) said in a report on Thursday, though the move into asset markets has only been truly convincing in China.
Following last year`s violent selloff, the combination of solid growth and a more cautious U.S. Federal Reserve should be positive for EM and riskier assets, Robin Brooks, chief economist at the IIF, wrote in a note.
"Our trackers fail to show a sizeable rebound in real money flows to EM beyond China, with flows to key emerging markets like India and South Africa remaining quite weak," Brooks said.
"The relatively anemic rebound in flows may be due to negative muscle memory from 2018 or – more likely in our view – reflect a broad positioning overhang in EM, after a decade of easy money and near-record inflows."
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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