Foreign funds leave Asia
The Asian financial crisis dealt a heavy blow to fund flows to emerging markets in the third quarter of last year, driving them to their lowest since early 1995, according to Standard & Poor's Micropal.
Up to US$2.9 billion was withdrawn from Asia's emerging markets between July and September as investors in Europe and the United States bolted for the exits, Micropal said.
Thailand freed the baht on July 2, setting off a chain reaction of toppling currency and equity markets in Southeast and Northeast Asia.
'Flows to emerging markets quickly went from best to worst in the middle of 1997,' Micropal said.
'During the second quarter, international emerging-market equity funds pumped $9.3 billion into emerging stock markets, the highest quarterly total since we started tracking these flows in the first quarter of 1995.' The figures for the three months to December - when the Hong Kong equity market suffered a severe drop - could be even worse, Micropal said.