Enthusiasm for emerging markets eases

PUBLISHED : Wednesday, 13 March, 1996, 12:00am
UPDATED : Wednesday, 13 March, 1996, 12:00am

FUND manager enthusiasm for emerging markets slumped in the final quarter last year, according to a survey by statistics company Micropal.

A review of 108 global funds, managed by 50 groups, revealed that sales plunged to US$55 million from $1.65 billion and $1.2 billion in the two previous quarters.

Fund managers were net sellers of Asian equities but net buyers of Latin American, European, Middle Eastern and African stocks.

Micropal spokesman Ian Wilson said: 'Latin America was the big loser in 1995 as the surveyed funds withdrew between $150 million and $200 million from the region's stock markets.' South Africa, India, and China-Hong Kong were most popular markets, with South Africa the star performer in the first nine months.

About $500 million flowed into Indian stocks despite the market's dismal returns.

'There were positive flows to India in each of the year's four quarters, with the second half of the year accounting for 60 per cent of the inflows,' Mr Wilson said.

Net inflows into China-Hong Kong accounted for $440 million.

The least popular markets in the fourth quarter included Malaysia, which suffered a net outflow of $140 million. South Korea saw $65 million and Greece $60 million in lost investment.

For the year, Chile and Brazil were the markets most out of favour. Each experienced outflows between $130 million and $140 million.

Asian stocks accounted for 45 per cent of the surveyed funds' portfolios during the fourth quarter.

This was a fall of 3 per cent from the previous quarter but 1 per cent above the year-earlier weightings.

In terms of individual countries, Brazil maintained is position as the most popular country, followed by Malaysia, Thailand and Mexico.